“We don’t undertake design so don’t need Professional Indemnity Insurance”

“We don’t undertake design so don’t need Professional Indemnity Insurance (PI)” is something we hear frequently when speaking to new prospects, this common misconception and stance used by some less experienced brokers can lead to significant exposure. 

 

Our stance on any risk clients may face is to explore the hidden exposures to ensure your business is properly protected avoiding potential exposure further down the line. 

Temporary works are commonly part of a contract such as hoarding, permitter fencing, access roads and temporary barriers and support. These works can go wrong leading to consequential loss which can be expensive to correct. 

 

Where any business is contracted to Design & Construct, significant exposure exists, even where the designs or other professional services are sub contracted out to a Third Party. In the event of the design being inadequate/defective this would lead you to being responsible for the costs whether you did the design or engaged others to design on your behalf, including any defence costs and expenses. The mere fact you may have engaged a Third Party to provide the design doesn’t mean you are exempt from liability, unfortunately rights of recourse is not always possible and therefore all the costs involved could fall at your own door and these costs can be significant and put your business at risk. 

 

The majority of projects will require plans and designs to be tweaked, even ever so slightly, in order to complete the works. The moment this happens, your business is responsible for those changes with a pure PI Exposure. Even an informal design check to approve them creates huge risk should those designs and plans later fail. This is a crucial point to note, PI insurance is a claims made based policy cover and therefore it is not the insurer at the time the error is made who deals with the claim it is the insurer who is on risk at the time the error is first notified, which could be many years after! 

 

If we consider materials, even the slightest change in manufacturer specification can cause devastating results, or perhaps you have been unable to source the original materials specified and replaced with a similar product, this could have serious consequences for the firm in the event of an inadequate specification. 

 

If you’d like to chat through your true exposure with our experienced team then we are here to navigate through the myths! 

 

info@centricitybrokers.com