University of Virginia Library

POLICY STATEMENT CONCERNING
INSURANCE COVERAGE
FOR PROFESSIONAL DESIGN SERVICES

In order to protect the interests of the University in new construction, renovation, and maintenance and repair projects designed by professional architect and engineering firms, it shall be the policy of the University to require these professional firms to carry adequate liability insurance with companies satisfactory to the University during the construction period and throughout the five-year Virginia Statue of Limitations period following the completion of construction.

The amount and type of insurance coverage considered to be adequate may vary on a project-by-project basis dependent upon the nature of the project and the degree of risk deemed to exist. Normally, the liability insurance provided by general professional risk coverage on a "Claims Made" basis will be adequate, provided that the policy limit of coverage is sufficient in consideration of the degree of risk and the total construction cost for the project. For projects in which the risk of a major loss is relatively high, coverage by a "Single Project" policy may be required.

The required amount of liability coverage established for each project may vary from an amount of not less than 25% of the construction cost for projects in which a low degree of risk of a major loss exists, to a maximum amount equal to the project construction cost for relatively high risk projects. Deductible limits shall be consistent with the professional firm's financial capacity.

Professional firms engaged by the University for design services shall be required to maintain the established insurance coverage throughout the construction period and the five-year Statue of Limitations period following completion of the work, and shall be required to provide an annual certificate of coverage throughout this period.

Normally, purchase of adequate liability insurance coverage shall be the responsibility of the professional firm. However, when the cost of coverage required for a high risk project would impose an unreasonable cost burden on the professional firm relative to the standard professional fee for the project, contract negotiation may provide for payment of supplemental insurance costs by the University outside the normal professional fee.

The acceptability of the insurance company shall be determined after taking into consideration the reserves, surplus and financial condition of the company.