Why the need for Professional Indemnity
Professional Indemnity (PI) insurance is a common contract requirement for sub-contractors. It is requested to show that the sub-contracting company has adequate underwritten protection in the event of any problems and/or claims arising.
PI insurance can cover sub-contractors in the event that a client suffers losses following the provision of advice, products and services, or design support. It is not uncommon for the sub-contractor to assume some part, or all of the design responsibility through their words and/or actions.
Currently, there is a trend for elements of design responsibility moving from the principal designer (architect/engineer) to the awarded principal contractor. This move, combined with the increase in popularity of ‘Design and Build’ construction projects, means the risk of sub-contractors unknowingly assuming or considered to have design responsibility, is high.
Sub-contractors wishing to support their bid/tender applications with pre-contract advice and support, plus applying variations to manufacturers’ guidelines and methods due to unforeseen site conditions are also at risk.
As a result of the tragic events at Grenfell Tower and other significant fires, the due diligence carried out by persons with responsibility has increased significantly. This includes the principal contractor, especially in relation to the compliance of product and/or method of certification. There is much greater scrutiny being placed on any changes made by sub-contractors to the original design and on the method statements of product manufacturers. Therefore, to indemnify themselves against unforeseen risk or the requirement for a greater level of cover for the same, sub-contractors must investigate the purchase of P I insurance cover.
ASFP PI Insurance Cover Scheme
To give reassurance to the wider industry in terms of the quality and professionalism of ASFP members, PI insurance has been a requirement of ASFP membership for some time. However, we are aware that the insurance industry has been taking its own steps to prevent losses from PI policies, by dramatically increasing premiums, and in some cases denying cover.
Consequently, in answer to the challenges outlined and to support all current members, the ASFP has partnered with an insurance provider to offer a PI insurance cover service.
The service is also available to individuals and companies who are applying to become a member of the ASFP and require PI as part of the membership criteria but have not felt the need for PI prior to membership application.
To take advantage of this new membership benefit, existing members can download and complete the PI Insurance Scheme form from the ASFP member area of the website or contact ASFP Membership Officer Tony Corcoran firstname.lastname@example.org for further information.
Prospective new members who wish to start a new application should contact ASFP Membership Officer Tony Corcoran email@example.com to discuss the ASFP membership application process and complete the PI Insurance application form included in the relevant Membership Application Pack.
The PI Scheme is offered via ASFP’s insurance broker partner. The ASFP role is simply to provide an introduction between the broker and ASFP members. The potential for discounts and support is due to ASFP members as a group being able to demonstrate they meet the ASFP’s competency and professional requirements. All information is handled on a confidential basis by the ASFP and our insurance partner.
The ASFP takes no responsibility for the quoted cost of professional indemnity premiums by any third party insurance broker and/or underwriter, nor does it take any responsibility for the acceptance and/or decline of professional indemnity insurance applications by any third party insurance under writer. Each application is dealt with by third party brokers and underwriters and judged on a case by case basis on merit.