Construction supervision and professional liability insurance are the two main research objects of this paper.
The research of this paper is based on the theory of engineering risk. From a subjective point of view, risk refers to the uncertainty about future losses (uncertaintyaboutfutureloss); in particular, a project in the design, construction and transfer of the various stages of operation may be subject to the risk known as engineering risk (projectrisk).
Liability is also a kind of risk, which is artificially defined in the law. The law defines various kinds of liability. Liability is the legal consequence of a natural or legal person's violation of legal obligations or infringement of the rights of others.
The risk that units and individuals engaged in various professional and technical work may cause financial loss or personal injury to their clients or others as a result of negligence or mistakes in their work, or to their employees or associates, is known as professional risk. The liability of professionals for damages for professional risks is professional liability.
Insurance is an economic system that pools similar risks and shares losses. Insurance is by far the most common and effective means of risk management. Because the project may encounter possible risks, in order to eliminate or compensate for the loss caused by the encountered risks, it is necessary to carry out engineering insurance.
According to the object of the insurance accident, insurance can be divided into property insurance, life insurance, liability insurance and guarantee insurance four categories. Among them, liability insurance is the insured civil liability for damages according to law or after a special agreement with the contractual liability as the object of insurance. Liability insurance can be divided into four categories: public liability insurance, product liability insurance, professional liability and professional liability insurance and employer's liability insurance.
Professional liability insurance, refers to all kinds of professional and technical personnel due to negligence or negligence in the work caused by the other party to the contract or the other person's personal injury or property damage to the financial liability of the insurance. Professional liability insurance began in 1890-1900 in Europe and the United States insurance market doctors professional liability insurance, belongs to a "more contemporary insurance". 1970s, professional liability insurance began to popular in western countries and towards maturity and perfection. The insurance coverage has expanded from a few types of insurance, such as medical liability insurance, to different types of professional liability insurance for designers, engineers, doctors, lawyers, accountants and at least 80 other professionals and other service providers.
Foreign countries, according to the scope of insurance liability, professional liability insurance is divided into two categories: the insured's work negligence (malpractice) liability insurance and business negligence (errorandomis sions) liability insurance. The former insurance object includes surgeons, dentists, nurses, lawyers and other professions; the latter insurance object includes accountants, architects and engineers, insurance agents and other professions. Professional liability insurance for consulting engineers belongs to the negligence liability insurance for engineers professional liability insurance (professionallia bilityinsuranceforArchitectsandEngineers).
In the international insurance market, the United States of America's liability insurance development is the most typical. 1948, the United States National Society of Engineers (TheNationalSocietyofProfessionalEngineers) for the first time to insure engineers professional liability insurance. By 1956, the British Lloyd's of London has been operating in the United States almost all the existing liability insurance business, but the engineers professional liability insurance services are limited to the recognized three engineers organizations. 1957, the United States of theContinentalCasualtyCompany started In 1957, theContinentalCasualtyCompany began to provide liability insurance to the Federal Engineers Association and the American Institute of Architects (American Institute of Architects). Since the 1960s, engineering losses began to grow at a steady rate, and insurance premiums increased accordingly. By the 80's, due to the huge engineering losses, the United States insurance company's professional liability insurance premiums began to increase at an alarming rate, thus creating the so-called "insurance crisis" (theinsurancecrisis). 1984, the state courts received more than 16.6 million civil engineering lawsuits; federal courts received more than 150,000 civil engineering lawsuits. Federal courts handled more than 150,000. Claims for engineers' professional liability were filed against 44 out of every 100 firms, and claims increased from an average of $40,000 in 1978 to an average of $148,480 in 1984.
2. China urgently needs to implement professional liability insurance for supervisors
There are two basic responses to risk: one is to retain the risk and control it, and the other is to transfer the risk out. In the project, the risk is mainly through the transfer of non-insurance contract, project insurance or project guarantee three ways to transfer. Specifically, the owner through the contractors, designers, supervisors and other parties to sign a service contract, the project part of the risk transferred to other parties, in addition, the owner and the contractor using project insurance or guarantee, can be part of the project risk transfer to the insurance company or guarantee agency.
Between the owner and the supervision unit through the construction supervision commissioning contract specifies the responsibility of the supervision party. For professional negligence caused by economic losses, the supervision unit should be compensated to the owner. In the supervision unit rely on their own strength can not bear the above liability, you can insure professional liability insurance, their own professional liability risk partially or completely transferred to the insurance company, by the insurance company to supervise the unit's ability to provide compensation protection.
Professional liability insurance in the developed countries of the perfection and maturity of the last three or four decades, but with the continuous development of China's socialist economic system and large-scale construction, supervision of professional liability insurance in China's implementation has been put on the agenda. 2000 January, Shanghai Tianan Insurance Company to launch the first construction supervision of construction projects liability insurance and approved by the CIRC.
In the field of engineering construction, due to the planned economic system in the past, the parties involved in the construction of the project are mainly state-owned parts of the economy, will inevitably result in the distribution of economic responsibility is not reasonable. China is currently facing the situation is, supervision of professional responsibility and professional risk does not match (see figure 1). 1995 promulgated the engineering construction supervision contract standard conditions of supervision unit of responsibility stipulates: "if the supervision unit negligence caused by economic losses, should be compensated to the owner. The total amount of compensation shall not exceed the total amount of remuneration for supervision." According to the Method of Calculating Engineering Supervision Fee issued by the State in 1992, the honorarium of the supervision unit in China is far lower than the international standard. Therefore, once the accident occurred, the supervision unit in the project only a small part of the project loss of financial responsibility, even if the loss is caused by the supervision unit of the obvious dereliction of duty.
In the market economic system, with the diversification of economic interests, involving the supervision unit of the economic responsibility of the disputes gradually increased, more and more owners require the supervision unit of their own professional negligence caused by the loss of the responsibility of full compensation. In this case, as a clear economic responsibility between the owner and the supervision unit, the supervision unit of the professional risk reasonably transferred to the insurance company means, supervision professional liability insurance is imperative.
3.3. the necessary conditions for the implementation of engineering supervision professional liability insurance in China
3.1. the revision of relevant laws and regulations
At present, in addition to the "General Principles of Civil Law" on the basic principles of compensation for damages to the enterprise, the "Construction Supervision Provisions" of the supervision units of the economic responsibility, qualification assessment and administrative penalties for negligence has also been made a specific provision. Article 48 of the General Principles of Civil Law stipulates the economic responsibility of enterprise legal person: "The legal person of an enterprise under national ownership shall bear the civil responsibility by the property which the state has authorized it to operate and manage. The legal person of a collectively-owned enterprise bears civil liability in respect of the property owned by the enterprise. The legal person of a Sino-foreign joint venture, a legal person of a Sino-foreign cooperative venture or a legal person of a foreign-funded enterprise shall bear civil liability with the property owned by the enterprise, unless otherwise provided by law." According to the provisions of the general principles of civil law, in the absence of other provisions of the law, the supervision unit of the economic responsibility is limited to the supervision unit of all the property and through the previous discussion, once the supervision unit of the negligence caused by the major engineering accidents, relying on its own property is unable to make compensation. Therefore, in this case, the corresponding laws and regulations of the supervision unit through appropriate means to transfer part of the economic responsibility to make separate provisions is necessary.
Only on the supervision unit of economic responsibility (including professional responsibility) to make provisions or not enough. If there is no supervision unit of liability insurance to make any administrative provisions of the construction unit in order to save the cost of insurance is likely to choose not to carry out professional liability insurance supervision unit. Although this is the contract between the two sides of the problem, but once the supervision unit caused engineering accidents, is bound to cause the following problems:
- construction units and supervision units of the responsibility of the dispute is not resolved after a long time, will seriously affect the construction units and supervision units of economic activities, disrupting the market order.
- As most of the current large and medium-sized construction projects are still invested by the state, if the supervision unit is unable to make compensation for its own responsibility, will cause serious losses of state property.
In this case, the more feasible way is to give full play to the function of government supervision, will be at all levels of government on the supervision of the qualification level of the approval of the unit to be utilized. Engineering Construction Supervision Regulations," Article 17 clearly states, "supervision units to implement the qualification approval system." At present, the qualification level of China's supervision units mainly depends on the supervision qualification of the head of the unit and the technical person in charge, the number and qualification of engineering technology and management personnel, registered capital and historical performance. Through the revision of the provisions of the engineering construction supervision, can be whether the supervision of professional liability insurance as one of the supervision qualification assessment criteria, so that no professional liability insurance supervision units can not participate in major engineering projects.
In the supervision unit of its professional negligence of professional responsibility at the same time, to be administrative penalties, to improve the quality of supervision, supervision market is also very necessary. Engineering Construction Regulations, Chapter VII, "Penalties" has detailed provisions. At present, for the professional negligence of the supervision unit, that is, when the supervision unit "caused major accidents due to work errors", the relevant departments can be warned, criticized, suspended, reduced qualifications, revocation of qualification certificates or administrative fines. In order to implement the supervision of professional liability insurance, it is necessary to "penalty" in the supervision of professional negligence and non-professional negligence to distinguish between the unit, and the supervision of the unit does not insure or intentionally reduce the amount of insurance behavior to be punished.
3.2. Revision of Construction Supervision Contract
According to the Contract for Construction Supervision, "the owner shall be compensated for any economic loss caused by the negligence of the supervisory organization. The total amount of accumulated compensation shall not exceed the total amount of supervision honorarium." Although there is no explicit provision in the contract, the part of the total cost that exceeds the remuneration of the supervisor is in fact borne by the owner. This is obviously unreasonable. Therefore, it is necessary to refer to international practice, China's engineering supervision contract revision, further clarify the supervision unit and the owner's respective responsibilities. This is also one of the necessary conditions for the implementation of supervision professional liability insurance.
IGRA1980PM is the International Association of Consulting Engineers (FIDIC) I published "consultants and consulting engineers project management agreement with the international model and international general rules", is used for the owner and project management consulting unit between the international general contract. It is worth noting that: first, the client (client, i.e., commissioned by the supervising engineer engaged in project management) is likely to be the owner (owner), but in a high degree of social division of labor conditions, but also may not be the owner. Secondly, strictly speaking, the international project management system and our construction supervision system does not mean the same, but IGRA1980PM as an international practice, it is the project manager (projectmanager) of the responsibility of the provisions of the responsibility for us to clarify the responsibility of the supervision engineers have an important reference significance.
IGRA1980PM 2 4 paragraph on the project manager's responsibility to make clear provisions. It clearly spells out the following issues:
(1) What issues the project manager should be financially liable for
- Claims, losses, expenses or costs caused by the project manager's obvious negligence or criminal acts (paragraph 2 4 1);
- The project manager has quoted any clauses in the documents that are contrary to the law or infringed the rights and interests of a third party, such as patents, copyrights, etc. (paragraph 2 4 3);
- The project manager has cited any clauses that are contrary to the law or infringe the rights and interests of a third party (paragraph 2 4 4 3). rights and interests of third parties (section 2 4 3);
- Losses caused by the Project Manager's decision making and guidance in the course of the services (section 2 4 5).
(2) Issues for which the Project Manager is not financially liable
- The Project Manager is not liable for work not designed by him or not under his responsibility (paragraph 2 4 5);
- The Project Manager is not liable for losses caused by any act of the Client, Contractor or Supplier which is not included in the scope of the Services or in the Project Manager's instructions and written advice (paragraph 2 4 3);
- The Project Manager is not liable for losses caused by decisions and guidance given in the course of the Services (paragraph 2 4 5). (clause 2 4 6).
(3) Project Manager's Financial Responsibility The Project Manager is not liable for all of his or her financial responsibilities. Under paragraph 241, "Financial Responsibility of the Project Manager", the Client shall hold the Project Manager harmless from any claims, losses, expenses or costs of any kind, direct or indirect, in connection with the Services, in excess of the total liability of the Project Manager (as set out in Part II of IGRA 1980PM); and shall indemnify or protect the Project Manager against any loss, damage, expense or cost in excess of that which is directly or indirectly related to the Services; and shall indemnify or protect the Project Manager against any loss, loss, expense or cost in excess of that which is directly or indirectly related to the Services. The Client shall indemnify or hold harmless the Project Manager from any claims, losses, expenses or costs directly or indirectly related to the Services, in excess of the Project Manager's own costs. However, such indemnification and protection by the Contractor shall not apply to claims, losses, expenses or costs arising out of the Project Manager's manifest negligence or criminal conduct. Because the owner does not compensate and protect the project manager's professional liability, when the project manager can not rely on their own strength to bear this part of the responsibility, should be carried out in advance professional liability insurance.
(4) Insurance
According to paragraph 2.4.4, "Insurance of equipment of third parties and owners", the project manager shall, at the owner's expense, arrange for and maintain third-party liability and specialized equipment insurance, "provided, however, that the project manager shall endeavor to obtain, at its own expense, reasonable professional liability insurance. to carry reasonable professional liability insurance."
3.3. Formulation of standard contract for professional liability insurance for project supervisors
Internationally, the standard contract for professional liability insurance usually stipulates the scope of coverage, exclusion of liability, and claims, and contractual changes in the first part, and specific limits of indemnification, deductibles, premium rates, and insurance period in the second part. For the coverage, exclusions of liability and other matters, please refer to the "Contract of Insurance for Professional Liability Insurance for Engineers" provided by the First State Management Group Company (a U.S. online liability insurance company). The Standard Contract of Insurance for Accountant's Liability Insurance used by Taiwan Products Insurance Co., Ltd. provides a detailed method of setting premium rates, which can be used as a reference when setting rates for supervisors' professional liability insurance.
4. Conclusion, Suggestions and Discussion
As a necessary condition for the implementation of the engineering supervision liability insurance, the relevant clauses in the General Principles of the Civil Law and the Engineering Supervision Contract should be revised to provide a legal basis for the supervisory units to make a full compensation for their professional liabilities; the Engineering Supervision Provisions should be revised to administratively strengthen the management of the supervisory units to take out professional liability insurance; reference should be made to the international practice; the international practice should be used as a reference for the formulation of the rate of the professional liability insurance for the supervisors. Management; should refer to international practice, in the "project supervision contract" to further clarify the economic responsibility between the owner and the supervision unit, and develop a standard contract of project supervision liability insurance. According to the previous research, for the engineering supervision liability insurance in China's specific implementation of the following suggestions:
1. To do a comprehensive study of the industry characteristics of supervision. Understand the general risk of supervision units and special risk, to find out the law of their occupational risk. Supervision units within the gradual development and improvement of the control of occupational risk of the code of conduct.
2. Further understanding of foreign engineers' professional liability insurance and other domestic professional liability insurance theory and specific practices, designed to adapt to national conditions, but also in line with international practice of the engineering supervision liability insurance system.
3. We are looking for regions where professional liability insurance is carried out earlier, the insurance industry is more developed, and the degree of internationalization of engineering projects is higher as the pilot of supervisory professional liability insurance, so as to accumulate lessons learned and gradually promote it to the whole country.
4. Allow foreign insurance companies to carry out professional liability insurance in a certain range of China, including supervision liability insurance, and actively utilize the research results of foreign companies on the Chinese market, drawing on the implementation of professional liability insurance specific steps.
5. Supervisory units and insurance companies to strengthen cooperation, **** with the search to determine the national conditions of supervision of professional liability insurance insurance limits, premium rates, deductibles and other contract details.
6. After China's accession to the WTO, to strengthen the internationalization of China's professional liability insurance research, and actively with the international practice, including China's supervisory companies how to obtain professional liability insurance in foreign countries as well as Chinese insurance companies how to foreign consulting firms to provide occupational insurance and so on.
From a microscopic point of view, the implementation of professional insurance for construction supervisors can benefit many parties in the construction industry, thus bringing prosperity to the whole industry. For the owners, supervision occupational insurance helps to make up for the losses caused by engineering accidents in a timely manner, to protect the smooth progress of the project; for the supervision unit, through the supervision occupational liability insurance, not only the ability to compensate for the protection of the insurance company's supervision and support to control occupational risk more effectively, thereby improving their own survival and competitive strength; for the insurance company, supervision occupational liability insurance As a relatively new type of insurance related to engineering construction, it has great market potential.
From a macro point of view, the implementation of professional insurance for construction supervision is the inevitable development of the socialist market economic system, which helps to establish the principle of reciprocity of rights and obligations in the field of construction, and reasonably allocates the project risk between the construction unit and the supervisory unit, so that the supervisory unit bears the responsibility and faces the same risk. The implementation of the project supervision professional liability insurance helps to establish a healthy construction market operating mechanism, and further promote the development of the construction industry.