Overview

As well as insurance professionals engaged in the day-to-day business of construction insurance, underwriting, claims negotiation and risk management this new publication should also be of interest to lawyers, construction professionals and contractors.

Professional Indemnity Insurance in the Construction Industry includes chapters on:

• Introduction, application of basic insurance principles, and the relationship with other insurance products

• How liability arises, the Bolam test, reasonable skill and care, fitness for purpose, duties of designers, influence of standard building agreements

• Nature of the policy wording, retroactive dates, policy extensions, exclusions and conditions, policy schedule

• Cover for construction professionals, architects, engineers, surveyors and project managers, underwriting criteria

• Design and Build Insurance

• Right of third parties, collateral warranties, economic loss and the complex structures theory

• Claims

• Risk Management for Professionals

The publication also makes reference to over 100 case studies.

Content

INTRODUCTION, APPLICATION OF BASIC INSURANCE PRINCIPLES, AND THE RELATIONSHIP WITH OTHER INSURANCE PRODUCTS

1.1 Introduction

1.2 Application of Basic Principles

1.2.1 Utmost Good Faith

1.2.2 Insurable Interest

1.2.3 Indemnity

1.2.4 Subrogation

1.2.5 Contribution

1.2.6 Proximate Cause

1.3 Relationship with Other Insurances

1.4 Latent Defects Insurance

2 HOW LIABILITY ARISES, THE BOLAM TEST, REASONABLE SKILL AND CARE, FITNESS FOR PURPOSE, DUTIES OF DESIGNERS, INFLUENCE OF STANDARD BUILDING AGREEMENTS

2.1 How Liability Arises

2.2 The Statutory Limitation Issue

2.3 Statutory Influences

2.4 Reasonable Skill and Care – The Bolam Test

2.5 The Fitness of Purpose Debate

2.5.1 Supplying a Product

2.5.2 Common Law and Contractual Influences

2.6 Other Factors affecting Liability

2.6.1 Legislation Unfair Contract Terms Act 1977

2.6.2 Defective Premises Act 1972

2.6.3 Occupiers’ Liability Acts 1957 and 1984

2.6.4 Law Reform (Contributory Negligence) Act 1945

2.6.5 Joint Tortfeasors and the Civil Liability (Contribution) Act 1978

2.6.6 Other Factors

2.7 Extent of Designer’s Duties

2.7.2 Statutes and Building Regulations

2.7.3 Negligent Misstatements

2.7.4 Site Factors

2.8 Influence of Standard Building Contracts

3 NATURE OF THE POLICY WORDING, RETROACTIVE DATES, POLICY EXTENSIONS, EXCLUSIONS AND CONDITIONS, POLICY SCHEDULE

3.1 Introduction

3.1.1 Nature of the Policy Wording

3.1.2 Typical Operative Clause Wording

3.1.3 The Claims Made Basis

3.1.4 “The insurer agrees to indemnify …”

3.1.5 “… in respect of any sum or sums which the policyholder may become legally liable to pay …”

3.1.6 “… as damages …”

3.1.7 “… for breach of their professional duty …”

3.1.8 “… as a result of any claim or claims made against the policyholder during the period of insurance …”

3.1.9 “… and arising out of the conduct of the business described in the Schedule …”

3.1.10 “… as the direct result of any negligent act, error or omission …”

3.1.11 “… committed by the policyholder …”

3.2 Legal Costs

3.3 Retroactive Dates

3.4 Policy Extensions

3.4.1 Loss of Documents

3.4.2 Libel and Slander

3.4.3 Dishonesty of Employees and Partners

3.4.4 Fees Recovery Costs

3.4.5 Breach of Warranty of Authority

3.5 Change of Partners

3.5.1 Incoming Partners

3.5.2 Outgoing Partners

3.6 Run-off Liability

3.7 Other Extensions

3.8 Policy Exclusions

3.8.1 Goods or Products Supplied

3.8.2 Jurisdiction and Territorial Limits

3.8.3 Personal Injury and Property Damage

3.8.4 Prior Circumstances

3.8.5 Warranties and Guarantees

3.8.6 Joint Ventures and Project Partnering

3.8.7 Related Companies

3.8.8 Intellectual Property

3.8.9 Miscellaneous Exclusions

3.9 Policy Conditions

3.9.1 Common Conditions

3.9.2 Data Protection Act 1998

3.9.3 Premium Payment

3.9.4 Third Party Rights

3.10 Conditions of Concern to Construction Risks

3.10.1 Adjudication Provisions

3.10.2 Payment of Policy Excess

3.10.3 Pollution and Contamination

3.10.4 Subrogation

3.11 Policy Schedule

 

4 COVER FOR CONSTRUCTION PROFESSIONALS, ARCHITECTS, ENGINEERS, SURVEYORS AND PROJECT MANAGERS, UNDERWRITING CRITERIA 51

4.1 Architects

4.2 Points to Consider

4.3 Underwriting Criteria

4.3.1 Qualifications and Experience

4.3.2 Number of Offices and Employees

4.3.3 Fee Income

4.3.4 Contract Sizes

4.3.5 Use of Modern Technology

4.3.6 Work Overseas

4.3.7 Retroactive Exposure

4.3.8 Claims Experience

4.4 Legal Aspects

4.5 Surveyors

4.5.1 Legal Aspects

4.5.2 Points to Consider

4.5.3 Underwriting Criteria

4.6 Consulting Engineers

4.6.1 Introduction

4.6.2 Underwriting Criteria

4.6.3 Contract Details

4.6.4 Overseas Work

4.6.5 Joint Ventures and Single Project Partnerships

4.6.6 Claims and Cover Levels

4.7 Project Managers

4.8 Specific Cover Issues

5 DESIGN AND BUILD INSURANCE

5.1 Introduction

5.2 Legal Aspects

5.3 Completion Date

5.4 Obligation to Insure

5.5 Dispute Resolution

5.6 Novation

5.7 Matters affecting the Policy Cover

5.8 Subcontracting

5.9 Design and Build Policy Wording

5.9.1 The Operative Clause

5.9.2 Professional Activities and Duties

5.9.3 Mitigating Costs Clause

5.9.4 Subcontractor’s Clause

5.9.5 Joint Ventures and Consortia

5.9.6 Indemnity Limit and Excesses

5.9.7 Collateral Warranties

5.9.8 Extensions to the Basic Cover

5.9.9 Policy Exclusions

5.9.10 Policy Conditions

5.10 Underwriting the Design and Build Risk

5.11 Underwriting Criteria

6 RIGHTS OF THIRD PARTIES, COLLATERAL WARRANTIES, ECONOMIC LOSS AND THE COMPLEX STRUCTURES THEORY

6.1 Introduction

6.2 Collateral Warranties – Legal Background

6.3 Definition of a Collateral Warranty

6.4 Complex Structures Theory

6.5 Contents of Collateral Warranties

6.6 Other Issues Surrounding Collateral Warranties

6.7 Contracts (Rights of Third Parties) Act 1999

6.8 Third Parties (Rights Against Insurers) Act 2010

7 CLAIMS

7.1 Introduction

7.2 Notification of Professional Indemnity Claims

7.2.1 Typical Notification Condition

7.2.2 Other Factors Affecting Notification

7.3 Adjudication

7.4 Claims Handling

7.4.1 Initial Notification

7.4.2 Investigation

7.4.3 Negotiation

7.4.4 Settlement

7.4.5 Use of Experts

7.4.6 Part 36 Offers

7.4.7 Disclosure and Inspection

7.4.8 Arbitration

7.4.9 Mediation

7.5 Time Limits

7.5.1 Other Factors

7.5.2 When does time start to run for insurers?

7.6 Other Limitation Factors

7.7 Insurance Coverage Issues

7.7.1 Non-admission of Liability

7.7.2 Duty to Co-operate

7.7.3 Insurer Entitled to Defend

7.7.4 Costs Proviso and Discharge of Liability

7.7.5 Mitigating Costs

7.7.6 Subrogation Rights

7.7.7 Contribution

7.8 Examples of Claims Against Professionals

7.9 VAT in Construction Claims

7.10 Global Settlements

8 RISK MANAGEMENT FOR PROFESSIONAL

8.1 Introduction

8.2 Reputation is No Defence

8.3 Professional Risk Management

8.4 Checklists for Architects and Engineers

8.4.1 Selecting the Client

8.4.2 Selecting the Specialist Consultant

8.4.3 Documentation

8.4.4 Specifications

8.4.5 Materials and Equipment

8.4.6 Running the Project

8.4.7 Extent of Services

8.4.8 Partial Services Commissions

8.5 Collateral Warranties

8.5.1 Initial Questions

8.5.2 Express Warranties

8.5.3 Indemnity Clause

8.5.4 Fitness for Purpose

8.5.5 Assignment

8.5.6 Insurance Clause

8.5.7 Novation

8.5.8 Copyright

8.5.9 Economic and Consequential Loss

8.5.10 Net Contribution Clause

8.5.11 Limitation of Liability

8.5.12 Contracts signed as a Deed

8.5.13 Dos and Don’ts when Signing Warranties

8.6 Safety Aspects

8.7 Environmental Liability Issues

8.8 Risk Financing

8.9 Disaster Recovery Plans

8.10 Tips for Notifying Claims

Details

Title: Professional Indemnity Insurance in the Construction Industry
Number of Pages: 164
Product Code: WS1393K
ISBN: ISBN 13: 978-1-85609-588-4 (9781856095884), ISBN 10: 1-85609-588-6 (1856095886)
Published Date: May 2013
Binding Format: Paperback
Book Height: 250 mm
Book Width: 190 mm
Book Spine: 8 mm
Weight: 0.40 kg