Professional Documents
Culture Documents
Agenda
PI Contractual Considerations
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Indemnity for claims made during the period of insurance as a consequence of professional
First party costs incurred prior to handover to mitigate matters that would have otherwise
Defence costs
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Defects Liability
Note: Policy will only cover claims made during the policy period (including Discovery Period). Maximum Policy Period 10 years
Feasibility studies Front end designs Detailed designs Technical information calculation Geotechnical studies Project management Surveying (Quantity and Land) Procurement management
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Covered Liabilities
Rectification costs (including first party prior to handover) Consequential losses (Profits / Revenue/LDs) Third party bodily injury and property damage (Only consultants not contractors)
Client requirements Financiers requirements Balance sheet protection Part of good corporate governance (risk management)
Types of Cover
Annual policy covering all claims made for all projects of the Insured Single project policy (Multi year 10 years max) Single project annual
Liabilities for:
Third party property damage Third party bodily injury Obstruction, loss of amenities, trespass, nuisance, interference, denial of access or any like cause
Occurrence based policy Period: Works and Defects Liability Completed operations coverage
Third party liability covers liability for third party property damage and bodily injury only Excludes professional services coverage for consultants (fee only work) Only covers professional risks of contracting activities Does not cover defective works
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CAR Insurance
Insures physical loss or damage to works First party policy (not a liability policy) Period Works and Maintenance
Visits coverage Limited/Extended maintenance (On site only) Full guarantee maintenance
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DE5 Covers all damages except betterment of defective part DE4 Excludes defective component part DE3 Excludes defective property DE2 Excludes defective property and that which relies upon it for support DE1 Total exclusion for defective design, plan, specification, materials or workmanship
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CAR covers defects but only where there is physical damage to the works CAR only provides coverage during the construction and defects liability period (must have guaranteed maintenance cover) CAR does not cover consequential losses (LDs)
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PI Claims
Design and Build Shopping Centre Car park Subbed D&B to third party contractor ECV: GBP 6m Defective design of expansion joints Cracking of car park Demolition and Rebuild Consequential Loss (Loss of trade) Subcontractor Capped Liability
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A building has a structural defect in one wall which causes an entire building to collapse
Covered by CAR during construction and maintenance period Not covered if damage after maintenance period. Covered by PI if the Insured is liable Consequential losses not covered. Covered by PI if the Insured is liable
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A building has a structural defect in a wall which causes damage in that wall only. The rest of the building has structural defects but theses other parts of the structure are not damaged
Damaged wall covered by CAR during construction and maintenance period Not covered if damage after maintenance period. Covered by PI if the Insured is liable. Rectification of other structural defects (not damaged) not covered. Covered by PI if the Insured is liable Consequential losses not covered. Covered by PI if the Insured is liable
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Relationship with underwriter Claims record Type of work Type of project (Construction, EPC / D&B, FEED) Contract value / Fees Territory Experience Risk Management Programme Structure
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Requirement to maintain coverage (12 years) Available at commercially acceptable terms Provide certificates of insurance / to whom it may concern letters Not policy Limits of liability (GBP 10m aggregate) Not any one claim coverage. Agg limit Principal not insured Annual coverage preferable
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