Duration of PI Insurance

sydthebeat

Quick query for the interested.

Does Insurance, specifically Professional Indemnity insurance, cover work done within that year, and how long does it hold for.

eg

Joe Bloggs architect signs off a house in 2007. Hes fully indemnified etc.
He chooses not to renew his insurance in 2010 and chooses a different career. In 2011 client discovers, while trying to sell house, that house is in wrong location and outside of original site as granted planning permission and client goes to sue JB. (realistically, this could be any reason)

queries:

1. Does JBs insurance from 2007 cover him?
2. if it does, what duration of time is covered?
3. If not, then i assume hes personally liable?
4. If hes personally liable, how long after signing off house in 2007 does he have to maintain insurance, even if hes not working in the industry any more?

DOCARCH

Tricky one - bascially, as far as I know, you 'have to' maintain PII for a minimum of 6 years after for example you cease work or retire (or complete a project). Again, as far as I know, there is a special type of PII for this situation (i.e. to cover past projects where a person is not working at present) - premiums should go down year after year as risk tends to diminish.

Slig

thats one I can see coming up again and again in the near future. I eould assume it varies between policies and is probably somewhere in the fine print. I can imagine that they would be covered if they have discontinued their policy.

PS anybody got any names of good PI insurance providers? (PM please)

archtech

Many professional bodies require their membership to maintain PI for a number of years (6 or &) after they ceasing trading.Not sure about the small print of the insurance policy.

John368

DOCARCH wrote: »

Tricky one - bascially, as far as I know, you 'have to' maintain PII for a minimum of 6 years after for example you cease work or retire (or complete a project). Again, as far as I know, there is a special type of PII for this situation (i.e. to cover past projects where a person is not working at present) - premiums should go down year after year as risk tends to diminish.

You have got it spot on. I recently enquired into this. The premiums taper off over the six years as the risk to the insurance company reduces. You should expect to pay about half the normal premiums over the six years of premiums. But check with your insurer.

John

muffler

Slig wrote: »

PS anybody got any names of good PI insurance providers? (PM please)

There's a thread in the AT Rep forum about PI so that should help. You have access there, yeah?

kkelliher

Its always a grey area but in general the insurance that is applicable is the insurance in place at the time the time the insured pearl/cause is identified therefore if you carry out works in 2007 and the error comes to light in 2008 it will be the 2008 PI that takes the claim.

Most PI inception's ask when you are taking out the policy if you wish to be covered for work in the past so it will come under the terms of the policy

mickdw

You are only covered if you have a valid policy at time of claim. You are bound to maintain cover for 6 year from project completion. Certainly that is what government construction projects require. A said above, there is a wind down policy that can be purchased to cover this 6 year period if not trading but tbh, the system is wrong. Nobody can force you really to keep cover in force. IMO, the whole system would be better if the policy in force on completion date of works was liable for any claims for the 6 years.

I am renewing soon & after being on to the insurers who appear to be about the most expensive on the market, they are promising a price reduction after I quoted some of the internet quotes ive seen. Of course he said that many of these cheap policies are worthless when you need to claim. He would say that though.