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

What is a manifest error? Expert determination examined (WH Holding v E20 Stadium)

Dispute Resolution analysis: The Commercial Court held that an expert determination contained manifest errors, rendering it not binding under the agreement. The court clarified that a 'manifest error' must be obviously wrong and capable of affecting the determination, without necessarily being a 'blunder'. This judgment provides guidance on challenging expert determinations, emphasising the limited scope for such challenges. It highlights the court's approach to balancing the finality of expert decisions with the need to correct obvious errors, offering crucial insights for parties considering expert determination as a dispute resolution method in commercial contracts. Practical implications written by Harriet Campbell of Penningtons Manches Cooper LLP.

SBCC announces release of updated Homeowner Contracts

The Scottish Building Contracts Committee (SBCC) has announced the release of its updated Homeowner Contracts and new Contract Administration Packs. Based on the JCT 2021 editions and adapted to comply with Scottish law and practice, the updated contracts are designed to provide homeowners with the necessary contractual protection when engaging consultants or contractors to carry out building works. The release comprises two main contracts: one for homeowners dealing directly with builders (SBC593) and another for projects involving consultants (SBC594), along with the corresponding contract administration model forms (SBC595 and SBC596), which provide template forms to assist with contract administration. The SBCC Homeowner contracts are currently available in digital format, with print versions expected in the coming months.

MHCLG announces decision to dismantle Grenfell Tower

The Ministry of Housing, Communities and Local Government (MHCLG) has announced the Deputy Prime Minister, Angela Rayner’s decision to carefully dismantle Grenfell Tower. This decision follows independent expert engineering advice, which determined that the Tower is significantly damaged and will continue to deteriorate over time, even with additional support measures. The deconstruction process will not commence before the eighth anniversary of the Grenfell Tower fire and is expected to take approximately two years. In the coming months, the government will appoint a specialist contractor to develop a detailed dismantling plan. The work will be led by technical experts with specific health and safety responsibilities, and will include a comprehensive methodology addressing environmental, health, and safety measures. The Metropolitan Police, HM Coroner, and the Grenfell Tower Inquiry have confirmed that all necessary evidence has been collected, ensuring that the dismantling will not affect ongoing investigations or legal proceedings.

DESNZ announces reforms to nuclear power plant development planning framework

The Department for Energy Security and Net Zero (DESNZ) has announced reforms to the planning framework for the development of nuclear power plants in England and Wales. Key reforms include facilitating the construction of Small Modular Reactors in the UK for the first time. Additional reforms include lifting the previous limitation that restricted nuclear development to eight designated sites, encouraging investment and enabling developers to identify optimal locations for their projects. This approach will support development across a wider range of sites and promote earlier engagement in the planning process, with developers encouraged to bring forward potential sites at the pre-application stage. Furthermore, the expiry date on nuclear planning rules will be removed, preventing projects from being timed out. A new Nuclear Regulatory Taskforce will also be established, which will report directly to the Prime Minister, Sir Keir Starmer. The Taskforce will spearhead improvements to nuclear regulations and expedite project delivery, including accelerating the approval process of new reactor designs, among other aspects.