Professional Indemnity insurance and risk management (continued)

Most Professional Indemnity policies will exclude losses arising from ‘Contractual Liability’ where the professional has entered into an agreement in which their liability, or duty of care, is more onerous than in the absence of the agreement. The insurance policy will only provide cover for losses which arise from the duty of care owed under Common Law or Statute, hence the need to be clear about these issues in an appointment document.


If the professional is undertaking a project as part of a team they should seek the addition of a Net Contribution Clause. This would limit their liability to that share of the loss as their responsibility bore to it, i.e. if they were 50% to blame, they could only be held liable for 50% of the loss. A clause like this can be found in the standard British Property Federation form of Warranty.


The best advice in the world can be given by a professional to their Client, but in the event of a dispute the professional will need to be able to prove it. Therefore, professionals should ensure that;

  • properly completed, dated and signed file notes are kept. Post-it notes are wonderful for quick messages but are not a replacement for accurate file notes.any amendments to instructions should be confirmed in writing. If the client refuses to do this the professional should do so, detailing the amendments and their understanding of what is required of them.
  • all meetings relating to the work should be minuted and copies of the minutes distributed to all relevant parties.
  • all relevant paperwork should be maintained on file (preferably in chronological order). Never provide a copy of the Professional Indemnity policy to Clients. The Insurance Broker or Insurer should be able to provide relevant proof of cover which should be satisfactory for the Clients requirements. After all, the policy is a contract between the professional and their Insurers, why should anyone else be able to see what it contains?


Although a relatively small number of claims are made against planning consultants, the following Case Studies provide an insight into the types of issues which can, and do, arise. Click here to read the Case Studies.

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