What is Professional Indemnity insurance?

Professional Indemnity (PI) insurance covers legal costs and expenses incurred in your defence, as well as any costs that may be awarded if you are alleged to have provided inadequate advice, services or designs that cause your client to lose money.

Many professions need to have PI as part of their respective industry body’s regulatory requirements. Even if you are not obliged to have PI insurance, without it, you could be liable for hefty legal fees and/or compensation payments.

  • Breach of confidentiality
  • Breach of intellectual property rights
  • Dishonesty
  • Libel and slander
  • Loss of documents

Professional negligence of the policyholder and their designers, consultants and subcontractors

  • The insured was employed to design and manufacture a number of tanks, which later leaked and failed. While there was no damage to the tank, the insured carried out an inspection where it noted that there were signs of stress (which is caused by excess pressure). In addition the ‘base’ (concrete) may not have been level, which caused more pressure on one side. This matter was fully defended without any claim payment being made – Settled £nil/Costs £8,000.
  • The insured was instructed by the main contractor to design, supply and construct the timber frame for a new primary school. The claim concerned the structural failure of the school’s floors/ceilings, leading to its closure, remedial works and associated costs. The cause was originally considered to be the failure of the glue product used rather than the insured’s specification. However, following the disclosure of new expert evidence, the claim was amended to include design defects – Settled £110,000/ Costs £15,000.

    IMPORTANT: Please complete this application as fully as possible and return it to Consort Insurance, together with any relevant plans, Schedules of Condition or other supporting documents.

    JCT clause 21.2.1 (or equivalent) insurance

    Section 1 - General details

    :
    £
    £

    Section 2 - Existing property

    If the existing property is being completely demolished or the contract site has already been cleared, please proceed to SECTION 3. Otherwise, please answer the questions below:

    YesNo
    YesNo

    Section 3 - Surrounding property

    Please give a description of all surrounding property not forming part of the Contract Works:

    YesNo
    If Yes, please forward a copy of this to
    dahlia.osuoha@consortinsurance.com
    YesNo

    Section 4 - Construction and extensions

    Please complete DEMOLITION Section if applicable (where such demolition forms part of a contract for erection, reconstruction, alteration or repair by the insured):

    Demolition

    YesNo
    YesNo
    YesNo
    YesNo
    YesNo
    YesNo
    YesNo

    Section 5 - Declaration

    The undersigned declares on behalf of all parties proposing for insurance that to the best of his/her knowledge and belief, the statements provided herein are true and complete and all material facts or circumstances have been fully disclosed. The undersigned declares and agrees that the proposal form together with any other information supplied shall form the basis of any subsequent contract of insurance and undertakes to inform the insurer of any material alteration to those facts occurring before completion of the contract of insurance.