25+ years
market experience across construction and financial lines
Financial Lines / Broker Insight
Professional Indemnity. Precision before price.
For construction professionals, the quality of a PI placement is decided long before a claim. It starts with how the risk is understood, structured and presented.
Written for insurance brokers placing PI for construction professionals. 8 minute read.
Working with Exance has been an effective and efficient process, they provided us with excellent service enabling us to provide our broker with 10-year Latent Defect Insurance which was vital to ensuring the completion of their client's projects.
Alex Nicholls, Focus Insurance
A+ rated capacity
available for construction professional indemnity
Broker-first
specialist construction PI underwriting, with responsive decision-making
The real test of Professional Indemnity Insurance is not how quickly a quote arrives. It is whether the policy has been built around the work the insured actually undertakes.
That distinction matters in construction. Design responsibility rarely sits neatly with one party. It moves through appointments, novations, subconsultants, delegated design packages, collateral warranties and design-and-build contracts. A business may describe itself as a contractor, project manager or engineer; its contracts may tell a more complicated story.
For brokers, that creates both an exposure and an opportunity. A well-presented risk gives an underwriter the confidence to distinguish a disciplined professional practice from a superficially similar but materially different one. The result is not simply a price. It is a placement with clearer intent, fewer surprises and a stronger foundation if a claim arises.
PI is a claims-made conversation
Professional Indemnity policies are generally written on a claims-made basis. In practical terms, the policy in force when a claim is made — and, subject to the wording, when a circumstance is notified — is the policy expected to respond. That makes continuity of cover, the retroactive date and prompt notification fundamental rather than administrative detail.
The schedule tells you the limit. The proposal, contracts and wording tell you whether the cover fits the risk.
A late notification, a break in cover or an incorrect assumption about prior work can materially affect the insured’s position. Brokers add real value when they help clients understand that PI protects a continuing professional history, not just the next twelve months of trading.
Placing the risk? Our broker’s guide to construction PI covers aggregation across multiple professionals and why construction run-off periods need to be longer.
In construction, job title is not the exposure
The most useful underwriting conversations look beyond labels. They examine what the insured designs, specifies, checks, certifies and accepts responsibility for. They also consider where that responsibility originates and how it is controlled.
Design responsibility can travel
A contractor may inherit design through a design-and-build contract or novation. An architect may rely on specialist input. An engineer may accept obligations through collateral warranties that extend beyond the original appointment. Each change in the contractual chain can alter the PI exposure.
Contract terms can amplify the risk
Fitness-for-purpose obligations, guarantees of outcome and liability that is wider than the professional’s common-law duty of care can create a mismatch with conventional PI cover. The detail varies by wording, so contracts and policy terms need to be considered together.
Subconsultants do not remove responsibility
Using a specialist does not necessarily transfer the client-facing liability. Underwriters will want to understand how subconsultants are selected, appointed and checked; whether they carry appropriate PI; and how evidence of that cover is maintained.
What strong PI underwriting looks for
Good risks are not risk-free. They are risks that can be understood. A clear submission should help the underwriter see the quality of the insured’s work, controls and contractual discipline.
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Work profile
A precise revenue split by discipline, project type, geography and client sector — with unusual or higher-hazard work identified.
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Contract discipline
How appointments are reviewed, who can agree amendments and how onerous obligations are escalated.
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Technical controls
Peer review, checking procedures, document control, change management and the route for signing off critical decisions.
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Claims learning
More than a loss run: the cause, response, corrective action and evidence that lessons have been embedded.
Five questions that improve a construction PI submission
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What does the insured actually take responsibility for?
Reconcile the proposal form with contracts, website language and revenue splits.
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Where does design responsibility enter the business?
Include novation, delegated design, specialist packages and subconsultant appointments.
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Which contractual terms cause the most concern?
Show the client’s review process for liability caps, warranties, indemnities and fitness-for-purpose language.
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What changed after previous claims or near misses?
Explain the control improvement; do not leave the underwriter to infer it.
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Does the requested structure match the contracts?
Check the limit, excess, basis of cover, retroactive date, territorial scope and any inner limits against the insured’s obligations.
The broker’s pre-submission checklist
Before approaching the market, test whether the submission answers the questions an experienced construction PI underwriter will ask.
- Current proposal form, signed and dated, with material changes clearly highlighted
- Revenue split by profession, project type, territory and largest contracts
- Representative appointments, collateral warranties and design-and-build terms
- Details of contract review authority and approach to caps and onerous clauses
- Subconsultant selection, appointment and insurance-verification controls
- Quality management, technical review and document-retention procedures
- Claims and circumstances narrative, including corrective action
- Continuity, retroactive date and any historic changes in insurer or cover
Specialist underwriting changes the conversation
Construction PI cannot be reduced to a rate applied to turnover. Two firms with similar income can present very different exposures once their disciplines, contracts, project portfolio and controls are understood.
Exance works with brokers placing Professional Indemnity Insurance for architects, engineers, structural engineers, project managers and design-and-build contractors. Our role is to interrogate the detail, make decisions and help brokers move complex opportunities forward with confidence.
Important
This article is general market commentary for insurance professionals. Cover is always subject to the individual policy wording, terms, conditions and exclusions. It is not legal advice.
Broker questions
Professional Indemnity, clearly explained.
Subject to the policy wording, PI can respond to claims alleging negligent professional advice, design, specification or services, and may cover defence costs and damages. The precise insured services, triggers, exclusions and limits must be checked for each risk.
It identifies how far back prior professional work may be considered under a claims-made policy, subject to all other terms. Continuity of cover and accurate disclosure of known circumstances remain essential.
Yes. A contractor may retain, inherit or assume design responsibility even where specialist designers are involved. Its contractual obligations and management of design should be examined closely.
Alongside a completed proposal, include clear revenue splits, project and discipline information, representative contracts, design and quality controls, subconsultant arrangements, and a narrative explaining claims and remedial action.
Have a construction PI risk that deserves a closer look?
Talk to Exance. We combine specialist underwriting judgement with responsive broker support.
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