Potentially, yes.

Design and Construct Professional Indemnity Insurance addresses different risks from Public Liability and Contract Works Insurance.

How do the policies differ? #

Design and Construct Professional Indemnity Insurance may respond to claims arising from design, specification, advice and other insured professional services.

Public Liability Insurance may respond to certain legal liabilities involving third-party personal injury or property damage.

Contract Works Insurance may cover certain physical loss or damage to insured construction works and materials during the project.

For example:

• A design error causing financial loss may involve Professional Indemnity
• Damage to neighbouring property caused by construction activities may involve Public Liability
• Fire damaging partially completed construction works may involve Contract Works

The actual policy responding will depend on the circumstances and wording.

Contracts can also require particular policies, limits and insured parties.

Holding one of these policies should not be assumed to replace the others.

Can physical damage form part of a Professional Indemnity claim? #

Potentially, depending on the circumstances and policy wording. A claim can involve physical damage or rectification costs arising from an alleged design error, incorrect specification, engineering error, consultant design error for which the contractor is responsible, or another professional advice error.

The important distinction is the cause of the claim. Design and Construct Professional Indemnity generally requires a connection with insured professional services. It does not ordinarily respond simply because workmanship is defective or construction work needs to be corrected.

Physical loss or damage caused by events such as fire, storm, theft, malicious damage or accidental damage during construction is generally considered under Contract Works Insurance.

Contact our team if you would like us to review the insurance requirements applying to a construction project.