Construction professional indemnity insurance covers design liability on a building project: the drawings, the specification, the calculations and the advice, as distinct from the work itself. Who needs it on a given project depends on who is carrying the design, and modern procurement has moved that around a great deal.
Who carries design liability
On a traditional contract the designers do, and the contractor builds to their drawings. On design and build the contractor takes the design risk, often subcontracting it back to the same consultants, and needs professional indemnity cover of its own. On a specialist package, the subcontractor designing their own element carries it for that element.
Why design and build changed the market
Contractors who never previously needed professional indemnity now routinely do, at limits set by employers rather than by their own assessment. Many discover it when a tender asks for it. A contractor tendering for design and build work without it is not tendering; the certificate is usually a pass or fail item.
What the policy answers for
The cost to the employer of putting right a design that did not meet the requirements, and the consequential losses that follow, plus the defence. It does not answer for workmanship, which is the contract works and public liability side, and the line between design failure and bad building is frequently the whole dispute.
Run off, which construction makes unavoidable
Construction claims arrive long after completion and employers frequently require cover to be maintained for a stated period after practical completion. A contractor or consultant that stops trading still faces those claims, so run off cover is part of the cost of the work rather than a separate decision.
Questions people ask about construction professional indemnity insurance
Who needs it on a construction project?
Whoever carries design liability: the designers on a traditional contract, the contractor on design and build, and specialist subcontractors designing their own packages.
Is workmanship covered?
No. Professional indemnity answers for the design and the advice; workmanship sits with contract works and public liability.
How long must cover be maintained?
Employers commonly require it for a stated period after practical completion, which is why run off is a planned cost.
What is a net contribution clause?
A clause limiting a consultant's liability to their fair share where several parties contributed to a loss. Insurers ask whether contracts contain one.