What Constitutes Construction Management at Risk?

What Constitutes Construction Management at Risk?

Your clients whose profession falls into the category of construction managers (CM’s) are often referred to as design professionals. The work they perform places them in the professional liability category. Those professionals are generally licensed architects, engineers, or contractors that have undergone specific training and/or certification in construction management and possess related work experience within the industry.

The services that they provide falls into two categories: agency and at risk. When the CM offers his or her services for a fee without an entrepreneurial profit interest and is acting in the owners best interest throughout each stage of the project, then theyre considered an agency CM. Construction management at risk implies that the CM is a consultant to the owner in the areas of development and design, which is a role similar to a general contractors job during the construction phase of the project.

There are liability issues to consider

At risk CM’s have to protect themselves in the language of the contract, as well as any agreement for services because there is a guarantee on the table. This pertains to the giving of advice or recommendations on planning, design, and scheduling of construction. Other things that must be considered pertinent to the subject at hand is the overall coordination of the separate contractors and construction activities in which they are engaged.

In short, the CMs goal is to successfully complete the project using management techniques that should be applied effectively to the various phases of the construction project, which includes implementing and coordinating safety programs. Professional services generally start during the pre-construction phase, which often includes overseeing the selection of design professionals, along with soliciting, reviewing, recommending and selecting bidders.

Depending on the type of job, the CM is usually the person that is supervising and inspecting construction activities. In some instances, the CM is responsible for securing governmental and municipal approvals and permits and selecting prime contractors. A CM may take on financial duties, such as cost estimates, preliminary budgets and cost tracking. With so much at stake, and so many areas where issues could result from failure to properly oversee a project, construction management at risk insurance is a viable component of any CM’s risk management.

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