Design-and-construct contracts can create broader contractual responsibilities for engineers than a traditional consultant engagement.
Before entering a D&C arrangement, check:
- who the engineer is contracted to
- whether the engineer is novated to the contractor
- the scope of design responsibility
- responsibility for coordination with other designers
- fitness-for-purpose wording
- indemnities and liability caps
- required Professional Indemnity limits and run-off periods
- whether the engineer accepts responsibility for work completed before novation
The insurance issue is not simply that the project is described as design-and-construct.
The important question is what professional responsibilities the engineer has actually accepted under the contract.
Insurers may also assess D&C work differently from conventional consultancy work because of the closer relationship with contractors, wider design obligations and potential exposure to project delay or rectification costs.
The contractual obligations should therefore be reviewed alongside the PI policy before the agreement is signed.
For further guidance on contract terms and Professional Indemnity considerations affecting design practitioners and engineers, see Engineers Australia’s Guide for design practitioners and engineers.
