Can the performance of a CM under an agency agreement be insured through professional liability insurance?

The performance of a Construction Manager (CM) operating under an agency agreement can indeed be insured through professional liability insurance, affirming that the answer is true. Professional liability insurance is designed to protect professionals against claims of negligence, errors, or omissions that may occur during the course of providing their services. This coverage is particularly relevant for CMs, who are responsible for overseeing and coordinating various aspects of a construction project.

Under an agency agreement, the CM acts on behalf of the project owner and owes a fiduciary duty to the owner, which can lead to potential liability if something goes wrong during the execution of construction activities. Given the nature of their role, having professional liability insurance provides essential protection against lawsuits that could arise from their performance, thereby safeguarding not only their financial interests but also the interests of the project owner.

This type of insurance provides a layer of security for construction managers, ensuring that they can continue to operate effectively while managing risks associated with their professional duties. It is vital for CMs to assess their insurance options and ensure adequate coverage to protect against potential liabilities in their projects.