Professional indemnity insurance and product liability insurance

Professional indemnity insurance

Professional indemnity insurance (PII) provides a professional person or business with an indemnity against claims or losses arising out of negligent acts, errors or omissions connected to the insured professional practice. PII also typically extends to the acts, errors and omissions of past employees. In construction projects, the most common risk that PII is intended to cover are claims arising out of the insured’s design responsibilities.

Any business that provides advice, consultancy or specialist services should consider whether it needs to take out PII cover.

Building contracts, professional appointments, sub-contracts and collateral warranties commonly require that PII is taken out and maintained by contractors, consultants and sub-contractors (as the case may be).

Guidelines and policy wording are produced by industry bodies, including the Architects Registration Board, Royal Institute of British Architects, Association for Consultancy and Engineering and Royal Institution of Chartered Surveyor. For some professions, ie architects, having PII in place is compulsory. While PII is not always compulsory, operating without PII is unthinkable because of their level of potential risk if problems occur and negligence claims are

To view the latest version of this document and thousands of others like it, sign-in with LexisNexis or register for a free trial.

TAKE A FREE TRIAL

Latest Construction News

Civil Procedure (Amendment) Rules 2026

The Civil Procedure (Amendment) Rules 2026, SI 2026/97 amend the Civil Procedure Rules 1998. Most provisions commence on 6 April 2026, with two amendments commencing at a date to be determined by other legislation.

Scottish Government publishes Building Safety Levy Expert Advisory Group minutes

The Scottish Government has published minutes from Building Safety Levy Expert Advisory Group meetings held on 4 November 2025 and 28 January 2026, both released on 5 February 2026. The minutes reveal concerns from members that the Levy Free Allowance threshold of 19 units had not been consulted on with stakeholders, with members strongly favouring setting this threshold in primary legislation rather than regulations. Scottish Government officials clarified their intention to set the Levy Free Allowance in regulations alongside rates and confirmed the Minister's commitment to strengthening reporting requirements in the Bill through government amendments expected on 4 February. The Levy commencement has been delayed from April 2027 to April 2028, with indicative rates to be published in June 2026 alongside an updated Business and Regulatory Impact Assessment. The group supported aligning the Scottish approach with the methodology used in England, with the Levy aimed at generating £30m annually. Officials committed to further engagement on cash flow concerns for Build-to-Rent developments and to explore data sharing relating to the Levy Free Allowance.

ACE publishes Currie & Brown report projecting that global construction costs will rise by 2.4% in 2026

The Accelerated Capability Environment (ACE) has published a report by Currie & Brown, forecasting that global construction costs will rise by 2.4% in 2026, with UK costs expected to increase by 3.6%. The cost management and advisory services provider noted that the Autumn Budget introduced no new tax incentives for construction, while wage and tax changes have increased the pressure on the industry.

Scottish Government launches consultation on housing delivery incentives and penalties

The Scottish Government has launched a consultation seeking views on measures to accelerate the build-out of homes on sites already identified for housing development, in response to falling housing starts and completions despite a substantial pipeline of consented land. The consultation supports the Housing Emergency Action Plan and related planning commitments, and examines whether incentives, penalties or other interventions could increase delivery rates, including for small and medium-sized housebuilders, within a plan-led, infrastructure-first framework under National Planning Framework 4. It is informed by evidence that slow delivery is driven primarily by post-consent factors such as market absorption rates, viability constraints, infrastructure costs, public sector risk exposure and limited developer capacity or commitment, rather than by the planning permission process itself. Drawing on previous reviews and research by bodies including the Competition and Markets Authority and the Scottish Land Commission, the consultation outlines potential approaches such as land assembly, public sector-led development, reform of compulsory purchase and sales powers, and policy tools to influence build-out rates, and notes that any future action may require legislative change in the next parliamentary session and would be subject to appropriate impact assessment. The consultation closes on 30 April 2026.

Professional indemnity insurance and product liability insurance