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Professional Indemnity for Design Professionals


Professional Indemnity & Environmental Liability Insurance has been developed specifically to address the common needs and risks faced by design professionals.

Professional Indemnity insurance covers legal costs and expenses incurred in your defence, as well as any damages or costs that may be awarded, if you are alleged to have provided inadequate advice, services or designs that cause your client to lose money. Environmental Liability Insurance provides coverage for the various financial costs that can occur as a result of pollution or contamination during or after carrying out a job. As a design professional, you tend to undertake activities that expose you to pollution which is covered under Environmental insurance.

The Design Professionals insurance has been developed specifically to address the common needs and risks faced by:

  • Building Designers
  • Engineers
  • Architects
  • Landscape Designers
  • Design Professionals
  • Surveyors
  • Interior Designers

 

Professional Indemnity Insurance for Design professionals covers you for:

  • Choice of cover limits from $1m to $10m to help protect against legal costs and claims for damages to third parties arising from an act, omission or breach of professional duty in the course of your business.
  • Automatic reinstatements If a claim amounts to your maximum cover, the policy automatically reinstates your cover value - up to five times to the full original amount.
  • Cost exclusive: You don’t need to pay any excess towards legal defence; only the excess towards the settlement of a claim.
  • Run-Off Cover: If you retire or leave the profession, our policy will still cover you for claims relating to incidents that occurred when you were working.
  • Vicarious Liability: If you engage consultants, contractors, subcontractors or agents, we can ensure you’re covered if they make any errors or omissions.

 

FAQ

Why do builders and other design professionals need Professional Indemnity?

Professional indemnity Insurance helps protect engineers, architects, and design professionals from the cost of a lawsuit when a client is dissatisfied with their work, a project is delayed, or other problems arise. This could be in house building design & drafting, project management advice, interior design, Landscaping or certification. If you offer any of these services and there is an error you will be held accountable with the expectation of rectification.

Is Professional Indemnity Insurance compulsory for design professionals?

Professional indemnity Insurance is often a requirement. Before clients hire you, they may want to see your Professional Liability Insurance Certificate. This assures them that your business is financially strong enough to withstand a worst-case scenario. If something goes wrong and your client needs to sue to recover losses, an insurer can cover the bill.

What kind of circumstances lead to a claim?

  • Fraud and Dishonesty of staff
  • Libel, Slander or Defamation against a third party
  • Loss of client documentation
  • Error in documents submitted to council
  • Legal liability for damages and claimants’ costs/expenses arising from the act, error or omission/civil liability of the “Company’s” employees
  • Wrongful or inadequate advice to client(s)
  • Acting without proper instructions from the client
  • Failure to act in accordance with client’s instructions or at all.
  • Failure to advise client
  • Breaches of Trade Practices Act/Fair Trading

Why is Environmental Liability Insurance important to a design profession?

Environmental Liability Insurance provides you coverage for the various financial costs that can occur as a result of pollution or contamination during or after carrying out a job. As a design professional, you tend to undertake activities that expose you to pollution. Some examples of activities that expose you to pollution risk are noted below.

  • Disturbance of ground features (e.g. excavation or filling)
  • Conduct work that could result in damages or impacts to any watercourse, wetland, groundwater or natural drainage system
  • Use, store, or transport hazardous substances such as fuels or chemicals (e.g. pesticides and herbicides)
  • Create dust, odours or blasts in the vicinity of residential or urban areas
  • Conduct work that creates a threat to any wildlife
  • Involve the use, destruction, wastage or depletion of natural resources

How is Environmental Liability different to Public Liability?

Public liability insurance is designed for professionals who interact with customers or members of the public. It protects against claims of personal injury or property damage that a third party suffers (or claims to have suffered) as a result of your business activities

Environmental liability insurance (ELI) covers professionals the cost of restoring damage caused by environmental accidents, such as pollution of land, water, air, and biodiversity damage. This kind of pollution risks are not typically covered under public liability insurance.

 

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Case Studies:

A Design professional retained by a third party to complete design and documentation for construction of tennis courts. There was an error and the Insured did not take into account need for stabilization of sub soil. Resulting, the soil was left too soft.

Resulted in a claim and a payout amount $25,300

A Design professional was a site supervisor in respect of construction of a sewage plant.  Alleged breach of contract, failure to obtain instructions prior to sign off and not advising the third party who contracted the building designer regarding deficiencies resulted in a claim. 


The payout amount was $32,300

A typical design defect of a balustrade designed by a design professional did not comply with regulations. There was a design defect where the length of the base of the glass should have been 760mm not 500mm which resulted in a claim.

The payout amount was $30,238