When clients select a professional team or contractors select design subcontractors, it is important that each of them carry a level of professional indemnity insurance appropriate to the size of the project and that clients specify in the contract the minimum level of professional indemnity insurance they are to maintain. Most clients or contractors will routinely check at the time of appointing the team that it has the required insurance in place. However, what is sometimes overlooked is that the obligation continues for the entire period - usually 12 years - of the consultant’s or subcontractor’s potential contractual liability for their work on the project.

How many clients continue to monitor that the cover is kept up once the project is complete? And more pertinently, when renegotiating a cheaper deal in conjunction with their broker, how realistic is it for consultants or subcontractors to remember the level of cover needed to maintain sufficient cover for projects completed more than 10 years ago?

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Building.co.uk

25March 2011