Design-and-construct work can affect Professional Indemnity underwriting because the engineer is commonly engaged by a builder or contractor and may work within a wider design delivery structure.
When assessing this exposure, an insurer may ask about:
- the percentage of the firm’s fees derived from design-and-construct projects
- the types and values of those projects
- whether the engineer is engaged from the outset or novated later
- the firm’s design, coordination, certification and review responsibilities
- whether other designers or subconsultants are appointed by the firm
- the experience of the firm and its key staff with this delivery model
- the contract forms commonly accepted and the firm’s contract review process
A firm that performs occasional, limited design-and-construct work may be assessed differently from one whose business is largely contractor-led or involves major projects. The label used for the project is less useful to an insurer than the engineer’s actual scope and contractual responsibility.
Design-and-construct exposure should therefore be identified clearly in the proposal or renewal information. The insurer can then confirm whether the activity falls within its appetite and whether further information, different terms or an endorsement is required.
