Closing engineering business operations does not end the potential liability arising from work already completed.
Professional Indemnity claims can arise years after the engineer has stopped trading.
For example, a later claim could involve:
- structural defects
- certification
- design errors
- inadequate documentation
- remedial work
- allegations arising during a later renovation or investigation
Because PI Insurance is generally written on a claims-made basis, simply cancelling the policy when the business closes can leave historical work uninsured.
An engineering practice should therefore consider run-off cover before cancelling its active Professional Indemnity policy.
Project and insurance records should also be retained after closure so the engineer can respond if a future allegation arises.
