Question

Could you ask the members if they’ve ever been asked (or indeed if they HAVE) £10m Professional Indemnity insurance?

We currently have £1m and that has been sufficient until this latest request apparently initiated by the leaseholder of the building to increase it to £10m and also the guarantee to hold for 12 years.

Whilst I’m getting a quote from our insurance agents (who think it will be in the £10k plus cost) – has anyone else been asked or do they have thoughts on this?

Replies

  1. As businesses grow and their exposure into the market also does in particular working in Leased Properties and Main Contractor Sites then the insurance requirements also rise I’m afraid.
    It is typical for a business with spread of this work to be requested hold the following as a minimum requirement

    • 10m Products
    • 10m Public
    • 5m Design

    In some cases you may also be asked to secure a Performance Bond which can be facilitated by the Bank.
    Hope this helps.

  2. We have 1 million however were also asked for 12 Years so we charged the client the whole amount for it which was £20 k over the 12 Years.
  3. We have £10m P.I. insurance which is broken down as follows;Professional Indemnity
    Limit of Indemnity: £5,000,000 any one occurrence.
    Professional Indemnity Excess of Loss.
    Limit of Indemnity: £5,000,000 any one occurrence.TOTAL PROFESSIONAL INDEMNITY LIMIT OF INDEMNITY – £10,000,000

    It’s not uncommon in our capacity as principal designer to be asked for £10m cover. But the member is right…it isn’t cheap.
    Hope this helps.

  4. We’ve been asked for this amount once in the 20 years I’ve worked in this industry. This was on tender work. We argued back that we weren’t covering the whole of the Councils properties & our work would not exceed more than £1 million. They did not have an answer as to why they were asking for £10 million (!) I would be asking why they warrant such a figure & to justify this, as to increase to £10 million is an absolute fortune.
    Hope it helps.
  5. We’ve been asked and it made no sense at all. I pushed back on this exact point with a large national customer and a tender situation. Essentially they didn’t care until I said we’ll pass across the undisclosed costs to them, then they listened and did the sensible thing.
  6. We work with a maximum cover of £5m professional indemnity insurance, this has always been acceptable to our clients.
    You do get the odd Collateral warranty document that will request 10milion cover that we always question when you consider the typical size of a catering contract.
    We have never had a client / builder refuse to proceed when we have questioned this.
    Hope this helps.
  7. We regularly get asked for £10m even up to £50m, we have £5m and we take a stance that is what we have and that’s that. To date it has always been accepted.
    £1m is a bit low £2m would be the norm, if the distributor would like a competitive quote try:
    Darren Cronin   ACII, Chartered Insurance Broker
    Client Director
    Jelf Clarke Roxburgh
    Tel: 01527 311146   Mob: 07971 065317
    Email: Darren.Cronin@jelfgroup.com
  8. 12 years is normal – We have been asked for 5 and 10 million and have always challenged it and 99% of the time it’s been fine that said we have now put 5 in place for a couple of contracts.
  9. We have £1m professional indemnity and that has always been fine, we design kitchens for Local Authorities. Maybe the members client is getting confused with Public / Employers Liability Insurance, we have that at £10m.
  10. We also have £1m cover and regularly get asked (or required) to have a much higher level. Each time we bat it back along the same lines that £1m should be more than sufficient for our works.
    When we are working on large tenders, they are normally consultant led therefore  we would not require PI.
    When we have enquired about pricing, very similar and you are required to keep it in place for 6,10 or sometimes 12 years.
  11. Yes. We have been asked for exactly same, over 12yrs. You can get it from ceda insurance recommended company for 1500.00 a yr. Contact Chris Wheatley at Jelf group. Tel: 01527 311147
  12. Might be worth double checking the type of insurance as we have had requests for £10m insurance. We took a further £8,000,000 insurance on public and products liability to meet the requirements.
  13. We have just been asked a similar question. We have been asked for 2m cover, talking to our insurance we should only req 500k or 1m at the most due to our turnover and risk. As not one project warrants a policy for miss information  etc over 1m. It’s a strange question and we are also still looking into it.
  14. Try Darren Cronin Darren.Cronin@jelfgroup.com at Jelf Clarke Roxburgh. They are aceda Associate https://ceda.co.uk/meet-our-members/associates/show/207
  15. This is becoming more frequent but appears to be a standard catch all requirement generally requested by the landlords legal adviser. These amounts are excessive and we always argue the point that the nature and value of the works does not warrant that level.
    We do similar to the member below and quote on a one off basis and give the client the option of either pay the extra amount or accept the current level of cover.
  16. Professional Indemnity Insurance.
    It seems that the Banks are asking for this as part of the loan agreement. We have had one that has asked for ten years cover, presumably  this was the period of the loan.
    It maybe that we all need some help on this one.
    At the moment we are refusing on the basis that we are not Consultants and do not charge for drawings. Furthermore we are not qualified to give this guarantee.
    My attitude is that we do not design the water, electric, gas, or air systems we just put items of furniture on the end of them.  We do assist the Customer in putting the items in the right place. But that is as far as it goes.
    I would be interested in the views of someone more knowledgeable than me.
  17. We were asked for £2m for 12 years on a secondary school kitchen project and managed to argue it down to £1 for 6 years. Key thing here is that PI insurance only covers financial loss arising from design issue. It is extremely unlikely that the financial loss incurred will ever be over £1m. Also they will be tied into paying the increased cost for the next 12 years if they accept!!!
    Darren Cronin darren.cronin@jelfgroup.com at Jelf is the expert on this stuff – I would advise them to speak with him.Please refer to: https://ceda.co.uk/meet-our-members/associates/show/207
  18. We have this a lot and normally a reduced PI is accepted by negotiation (ours is £2m). They will have to hold it for 12yrs if they provide a collateral warranty, which the landlord will require. It could be £1k per million PI easily, so £10k for 10m.
  19. We have and require £10 Million for local government and MOD projects. We use UK Special Risks. Ask for Matthew and quote us as the lead I’m sure they will be very helpful – Tel: 01634 862525

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