Glossary

A construction defect is any deficiency in the design or construction of a building or structure resulting from a failure to design or construct in a reasonably workmanlike manner and/or in accordance with a buyer's reasonable expectation. The most dangerous defects have the capacity to fail, resulting in physical injury or damage to people or property. That said, many defects present no increased risk of injury or damage to other property but nevertheless cause harm to the property owner in the form of loss of use, diminution in value, and extra expenses incurred while defects are corrected. This latter type of defect is often referred to as a passive defect. Whether, and to what to extent, coverage applies in liability policies for claims alleging construction defects has been heavily litigated. (Note: Many states have more specifically defined the term "construction defect" for purposes of applying statutes that dictate processes for remedying and litigating construction defect claims. These statutory definitions vary by state.)

Construction management (CM) encompasses a range professional advisory services to the owner of a construction project on virtually any aspect of the project, including financing, contract negotiations and awards, time/cost consequences of design and construction decisions, scheduling, purchase of critical and long-lead items, budgets, and monitoring design and construction teams. It can be done on a stand-alone basis (agency CM) or in conjunction with the actual construction of the project (CM at risk).

Construction management (CM) at-risk is a form of CM in which the construction manager acts both as a consultant to the owner in the development and design phases and as the equivalent of a general contractor during the construction phase.

Construction management (CM) professional liability insurance covers numerous professional exposures created by the providing of CM services. At one time a specialty policy, this coverage is now included within most architects and engineers professional liability and contractors professional liability policies. The terms of coverage are similar to those found in design professional liability insurance but will include a number of specific exclusions that are intended to remove coverage for construction-related claims that are typical of general contracting operations, which are more appropriately covered under the contractor's general liability insurance.

The Construction Risk and Insurance Specialist (CRIS ® ) certification demonstrates expertise in construction risk management and insurance. Its curriculum consists of a series of courses devoted to the insurance and risk management needs of construction projects and contractors. Those who complete the program are entitled to display the CRIS certification to demonstrate their knowledge of construction insurance and risk management as well as their dedication to the construction industry. CRIS courses are approved for insurance agent or broker continuing education (CE) credit and Certified Public Accountant (CPA) continuing professional education (CPE) credit in most states. The CRIS program is administered by International Risk Management Institute, Inc., and delivered online at CRIS .

Constructive discharge is an attempt by an employer to force an employee to resign (rather than terminate the employee) by making the employee's working conditions highly disagreeable. Considered a "workplace tort," these acts are covered under employment practices liability insurance (EPLI) policies. To sustain a claim for constructive discharge, employees must establish either that employment conditions are personally directed at the employee or that the conditions violate fundamental constitutional rights. (Merely unfair conditions of employment, such as unequal pay scales among genders, may not necessarily establish a claim.) For example, where a former police chief of detectives was stripped of all duties and forced to sit all day at a desk in a windowless storage closet without a telephone, the court found that the employee stated a valid claim of constructive discharge.

Constructive notice is presumed knowledge of facts and circumstances by the party responsible to know or take notice of such facts and circumstances. Constructive notice is a legal fiction where a reasonably diligent person is assumed to have known about something even if they did not receive actual notice. For example, a defendant should have had knowledge of the defective or dangerous condition given the obvious nature of the condition and the defendant's involvement with the property.

A property damage (PD) loss that is a "constructive total loss" is treated as a total loss because the cost of repairing the damaged property exceeds the value of the property.

A container ship carries its entire load in truck-size containers.

The contents rate is the property insurance rate on personal property, most of which is likely to be contained within a building.