Using an external designer does not necessarily remove a contractor’s professional liability exposure. Under a Design and Construct contract, the contractor may accept responsibility to the client for professional services performed by consultants it engages.

Which consultants can create an exposure? #

Subcontracted professional services may be provided by:

• Architects and building designers.
• Structural, civil and building services engineers.
• Draftspersons.
• Surveyors and other specialist consultants.

The contractor may not perform the design itself, but it can still face a claim if it is contractually responsible for the consultant’s work.

Does the consultant need Professional Indemnity Insurance? #

Insurers may require subcontracted consultants to maintain their own Professional Indemnity Insurance. Requirements can include:

• A suitable limit of indemnity.
• Cover for the services being performed.
• An appropriate retroactive date.
• Maintaining cover after the work is completed.
• Providing current evidence of insurance.

The consultant’s insurance does not replace the contractor’s Design and Construct cover. It protects the consultant, while the contractor can still face a claim from its client or another party.

What should contractors check? #

Before engaging a consultant, consider their qualifications, experience, scope of services, contract terms, insurance limit and claims history where relevant.

The appointment agreement should clearly document each party’s role. Broad indemnities, fitness-for-purpose obligations or responsibility extending beyond the consultant’s services may create additional exposure.

What should be disclosed to the insurer? #

Tell Webber Insurance how professional services are provided, including work completed internally, by related entities and by subcontracted consultants. Insurers may also request copies of consultant agreements and insurance certificates.

Webber Insurance can provide a high-level insurance review of relevant contract requirements and arrange referral for a more detailed contractual insurance review where needed.