Will Professional Indemnity Insurance increase in 2022 ?

Question

How to demonstrate a company is managing risk to Client, Employee and Public ?

Having robust Company Policy, Accreditations and Terms/Conditions agreed by Underwriters.

Any other options available ?

Dave Cahill · Answer

The UK construction PI market is still distressed. However, the favourable premium and terms are starting to attract new players and we are expecting to see new capacity becoming available at the start of 2022. This won't revolutionise the market but it might help prevent it getting any worse.

Insureds will need to prepare well in advance of renewal in conjunction with their broker, leaving at least three months. Be proactive and provide lots of information about how you assess and manage risk, especially where you subcontract design outside of organisations. Anyone involved in D&B work should also look very closely at their PI policy to understand what cover you have when you accept novated designs. Insurers often exclude this risk or insist on some unrealistic checking requirements so you should know what's covered and what isn't.

Anyone with a claims history will continue to have difficulty and the key activities of concern remain cladding and fire protection systems. My recommendation to any business is to always engage with a specialist construction insurance broker. We were recently approached by a customer who had been declined cover for "cladding" activities. This was a specialist stone façade contractor delivering 100% non-combustible works! The incumbent broker didn't understand or communicate the difference between stone cladding and the ACM cladding which has generated all the claims and from which insurers are running scared.

DC

Will Professional Indemnity Insurance increase in 2022 ?

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