A builder may need Professional Indemnity Insurance when the business provides, manages or accepts responsibility for design or other professional services.

For construction businesses combining physical construction with professional responsibilities, a Design and Construct Professional Indemnity structure can be relevant.

What activities can create a professional liability exposure? #

Examples include:

• Design or drafting
• Design and construct contracts
• Engaging architects or engineers
• Accepting responsibility for external consultants
• Specifying products or building systems
• Coordinating designs
• Reviewing designs prepared by others
• Project management
• Construction management
• Technical advice
• Design changes during construction
• Professional certification or calculations

What if the design is outsourced? #

Outsourcing design does not necessarily remove the builder’s exposure.

A contract can still make the builder responsible for the overall design, including professional work completed by architects, engineers or other consultants engaged by the builder.

Claims can involve allegations of:

• Design errors
• Incorrect specifications
• Consultant coordination failures
• Delays
• Rectification costs
• Other financial loss

Professional Indemnity Insurance does not replace Contract Works Insurance or Public Liability Insurance.

It is also generally written on a claims-made basis, so retroactive cover and continuity of insurance can be important.

Contact our team before accepting design responsibility or entering a design and construct contract.