There is no single Professional Indemnity Insurance limit suitable for every Project Manager.

The appropriate limit depends on the projects, services, contracts and potential severity of a claim.

What should be considered? #

Factors can include:

• Client contract requirements
• Tender requirements
• Project size and value
• Project complexity
• Value of property or assets involved
• Annual professional fees
• Largest client or project
• Budget responsibilities
• Contract administration responsibilities
• Design coordination
• Technical advice
• Use of subcontractors or subconsultants
• Industries and jurisdictions
• Potential delay costs
• Potential rectification costs
• Defence costs
• Aggregate limits
• Reinstatements
• Excesses

The value of the Project Manager’s own fee can be significantly lower than the financial loss alleged following a major project delay or error.

What about subcontractors? #

Where subcontractors or subconsultants are engaged, their:

• Activities
• Qualifications
• Insurance
• Professional Indemnity limits

should be considered as part of the overall exposure.

There is no universal rule that every subcontractor must maintain the same Professional Indemnity limit as the Project Manager. The appropriate requirement depends on the services, contract and exposure.

A contractual minimum limit should also not automatically be treated as the appropriate overall limit for the Project Manager.

Contact our team before accepting materially different insurance requirements or significantly larger projects.