Professional indemnity insurance in construction projects
Professional indemnity insurance in construction projects

The following Construction practice note provides comprehensive and up to date legal information covering:

  • Professional indemnity insurance in construction projects
  • Requirement to hold professional indemnity insurance
  • Fitness for purpose
  • Level of cover
  • Example PI clause

This Practice Note looks at professional indemnity (PI) insurance in the context of construction projects—the requirement to hold insurance, the level and basis of cover and typical wording contained in clauses requiring professional insurance to be maintained. For a wider review of professional indemnity insurance, see Practice Note: Professional indemnity insurance—essentials.

This Practice Note refers to a consultant’s obligations to maintain professional indemnity insurance, however main contractors and sub-contractors taking on design responsibility will also be required to maintain this insurance and the principles referred to below also apply to those contractors.

Requirement to hold professional indemnity insurance

A consultant’s appointment for a construction project will routinely require the consultant to take out and maintain PI insurance (sometimes referred to as PII). For many construction professionals, it is compulsory for them to maintain PI insurance, eg Standard 8 of the Architects Code of Conduct requires that architects must not undertake professional work without adequate and appropriate PI insurance in place.

PI insurance covers the consultant in respect of liability that arises out of its performance of its professional activities, ie the services which the appointment requires it to perform. In other words, it covers the consultant in the event of claims being made against it for professional negligence. See Practice Note: Professional indemnity insurance—essentials.

Ensuring that the consultant has the protection in place is in the interests of both

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