Subcontractors · Best Practice · Pre-Construction
Professional Indemnity Insurance Verification
A verification record for professional indemnity insurance held by designers or specialist subcontractors providing design input.
Last reviewed: 29 March 2026 — This guide reflects UK law as of this date. Contract Law remains current with no amendments enacted as of 29 March 2026. Next scheduled review: 29 March 2027.
| Legal basis | Contract Law (no statutory requirement for PI except regulated professions) |
| What PI covers | Professional negligence — design errors, incorrect specification, negligent advice that cause loss. |
| Claims-made basis | PI insurance is typically on a 'claims-made' basis — continuous coverage must be maintained throughout the limitation period (6 or 12 years). |
| Retroactive date | Claims arising from work done before the retroactive date are excluded. Must predate the start of design services. |
| When to require | Structural/civil engineers; architects; mechanical/electrical designers; any subcontractor with design and build responsibility. |
1. Professional Indemnity — Protecting Against Design and Professional Errors
PI is required wherever a subcontractor has design responsibility. The critical issue is continuity — because PI is claims-made, the policy must remain in force throughout the period when claims could be brought (up to 12 years after practical completion for contracts under deed).
Unlike EL and PL insurance, PI is not occurrence-based. It operates on a claims-made basis, meaning the policy in force at the time the claim is made responds — not the policy in force at the time the negligent act occurred. This means continuous coverage is essential. If a subcontractor allows their PI policy to lapse after completing the project, any claim arising from their design work during the limitation period will be uninsured.
The retroactive date on a PI policy determines how far back prior acts are covered. For the policy to respond to claims arising from the current project, the retroactive date must predate the start of any design services provided by the subcontractor on this project. The PC must verify this as part of the pre-mobilisation insurance check.
PI coverage must remain continuous throughout the latent defect period — not just during construction
For contracts under deed, this means maintaining PI cover for up to 12 years after practical completion.
2. PI Verification Checklist
The following table sets out the fields that a well-structured PI verification checklist should include.
| Field | What to record |
|---|---|
| Subcontractor name | Matches certificate exactly? Y/N |
| Insurer | Name and FCA authorisation? Y/N |
| Policy number | Recorded. |
| Period of cover | Claims-made period confirmed. Expiry date. |
| Retroactive date | Date from which prior acts covered. Predates project design start? Y/N |
| Cover level | £[amount] per claim or aggregate. Meets contract minimum? Y/N |
| Scope of cover | Does the policy cover the type of design being provided? Y/N |
| Relevant exclusions | Any exclusions applicable to the scope? Y/N |
| Continuity requirement | Contract requires notification of any policy change? Y/N |
| Renewal reminder | Set for 2 months before expiry. Y/N |
| Verified by | Name, role, date. |
The PI verification checklist should be completed for every subcontractor with design responsibility. The completed checklist and a copy of the PI certificate should be filed in the project records. The contract should include a clause requiring the subcontractor to notify the PC of any change to their PI arrangements.
3. Common Mistakes
Not requiring PI from subcontractors with design responsibility
Any subcontractor carrying out design work — whether a specialist engineer, an architect, or a design-and-build trade contractor — should hold PI insurance. Without it, there is no cover for design errors that may not emerge until years after practical completion. The PC must identify all subcontractors with design responsibility and require PI certificates before appointment.
Not checking the retroactive date against the project design start date
The retroactive date determines how far back in time the policy covers. If it postdates the start of design services on this project, any claims arising from early design work are excluded.
Not monitoring PI continuity after the project completes
PI is claims-made. If the subcontractor allows their policy to lapse after practical completion, claims brought during the limitation period (up to 12 years) will have no cover.
Accepting PI levels inadequate for the design risk
The cover level must be proportionate to the design risk. A structural engineer designing a multi-storey frame needs higher cover than a subcontractor specifying door ironmongery. The contract should specify the minimum PI level required and the PC should verify that the certificate meets or exceeds that level.
Not checking exclusions for specific construction risks
PI policies may exclude specific construction risks such as RAAC, certain cladding types, or fire engineering. These exclusions must be identified and assessed against the project scope.
4. Frequently Asked Questions
What is the difference between PI and product liability insurance?▾
PI covers negligent professional services. Product liability covers defects in physical products supplied.
Why does PI insurance need to be claims-made rather than occurrence-based?▾
Professional negligence claims often arise years after the negligent act. Claims-made policies ensure the current insurer responds, providing more reliable coverage for long-tail risks.
What is run-off cover and when is it needed?▾
Run-off cover is a PI policy arranged when a business ceases trading — it covers claims made after the main policy period ends. Without run-off cover, any claims brought after the business closes will be uninsured, leaving the client or PC exposed.
What minimum PI level should be required?▾
Depends on design complexity. Typical: Architect £1m-£5m; Structural engineer £1m-£10m; MEP designer £1m-£5m; Specialist subcontractor with design £250k-£2m.
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