Subcontracting professional services should be managed as both an insurance and contract issue. A written subconsultant agreement can help define what the subcontractor must do and how responsibility is allocated between the parties.
Before appointing a subcontracted engineer or consultant, consider:
- defining the scope, deliverables and responsibility for design coordination
- checking qualifications, licences and engineer registration where required
- confirming the subcontractor’s PI limit, retroactive cover and relevant professional services
- checking whether the subcontractor must maintain PI cover after completing the work
- requiring prompt notice of complaints, errors, claims and circumstances
- avoiding indemnities or warranties that create responsibility beyond the agreed scope
- keeping contracts, certificates of currency and project records
A certificate of currency confirms that a policy existed on the date shown. It does not prove that every activity, contract or future claim is covered.
The engineering firm should also check its own PI policy and disclose material subcontracting arrangements where required. Its responsibilities to the client and the subcontractor’s separate insurance need to be considered together.
Consult Australia’s standard contracts guidance includes a Subconsultant Contract developed for professional consulting services.
