Construction Insurance and UK Construction Contracts
Page 155
CHAPTER 10
Professional indemnity insurance and directors’ and officers’ liability insurance
Professional indemnity insurance and directors’ and officers’ liability insurance
10.1 In the previous chapter we have discussed some of the principal considerations applying to liability policies, particularly public liability policies. In this chapter we discuss aspects peculiar to professional indemnity policies, and a particular variant of such policies providing cover for the liability of company directors and the officers of companies. 10.2 The feature of such policies is that they are intended to include indemnity against the risk of professional persons being held liable for economic losses whether or not those losses are in any way connected with the occurrence of physical damage - in contrast to public liability policies, which are intended to cover liability for physical property damage (in addition to indemnity in respect of liability for physical injury or death) and CAR policies, which are triggered by physical damage (see above). 10.3 The persons likely to take out professional indemnity policies in connection with construction projects include architects, engineers, quantity surveyors, surveyors and project managers (as well as many others). Indeed, it is generally professional misconduct for such professionals to practise without adequate insurance.1 Generally we do not seek to distinguish between the terms of policies for different professionals, concentrating on the uniting features commonly found in such policies. An exception to that is the position in respect of contractors’ professional indemnity policies, which raise some particular considerations. 10.4 Further, we do not seek to repeat here general considerations applicable to professional indemnity policies as to other liability policies and discussed in the previous chapters, such as the authorities relating to aggregation or the principles applying to settlements reached without the consent of the insurer.Professional indemnity cover
10.5 Whilst the precise form of insuring clause will vary from policy to policy, in its simplest form the insuring clause will usually provide that:Insurers will indemnify the Assured against any claim first made against them during the Period of Insurance in any respect of any civil liability.