Professionals

Design &
Construct PI

Historically many contractors have had no need for Professional Indemnity insurance – this being a requirement for the traditional professional advisors (such as the architects and surveyors). However contractors are increasingly taking on a design liability either by employing their own in-house professionals or by assuming a liability where they sub-contract out the design element.

When any building contractors undertake contracts on a design and construct basis, they stand exposed, and likely to be the client’s first port of call in the event of a design or specification related problem. Even if the claim is ultimately the responsibility of another party, the costs of initially defending and then redirecting liability can be high.  The contractor will be held responsible regardless of their ability to enforce an action against any negligent party.

As a result, Design & Construct (“D&C”) Professional Indemnity insurance will need to be considered – and is often, in fact, contractually required by the Employer under the respective JCT contract clause. D&C Professional Indemnity insurance covers the insured firm against its legal liability for damages, costs and expenses arising out of their professional activities. 

Is Design and Construct included within Public Liability insurance?

D&C professional indemnity insurance covers risks that public liability insurance does not.

Standard Public Liability insurance covers legal liability for injury to third parties or damage to third party property and will generally contain a policy exclusion for claims arising out of any advice, design or specification for a fee.  Design & Construct professional indemnity insurance covers claims arising from advice, design or specification and is not restricted to legal liability arising from injury or damage, i.e. it covers legal liability for pure financial losses.