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Construction professionals
Yes, employer’s agents need professional indemnity insurance. On a design and build project you run the contract for the client: preparing or checking the Employer’s Requirements, valuing the contractor’s applications, issuing notices and reporting progress. Mistakes in that work cost the client money without injuring anyone, and PI is the policy built for that. For RICS-regulated firms and architects, PI is also a regulatory requirement; for everyone else it is a contractual one, because clients and funders usually insist on it.
Part of: Professional indemnity insurance at Apex
In short
An employer’s agent acts for the employer under the JCT Design and Build Contract, with authority to issue and receive notices and instructions on its behalf. That puts your mistakes straight into your client’s accounts: an overvalued interim payment before the contractor fails, a pay less notice served too late, or Employer’s Requirements with gaps the contractor prices as change. RICS practice information says that if the agent prepares the Employer’s Requirements and they do not reflect what the employer requires, liability for the errors falls on the agent. Many employer’s agents are not RICS-regulated, so whether PI is compulsory depends on who regulates you.
Last reviewed 5 October 2026 by the Apex professional indemnity team.
Under the JCT Design and Build Contract, the contractor completes the design and carries out the works, and the employer sets out what it wants in documents it provides. The employer’s agent sits between the two. In the contract wording RICS quotes from the 2016 edition, the employer’s agent has “full authority to receive and issue applications, consents, instructions, notices, requests or statements and otherwise to act for the Employer”, unless the employer limits that authority by notice.
That authority is why PI matters. Almost nothing an employer’s agent does can cause an accident, but plenty of it can cost the client money: paying for work not yet done, losing the right to withhold a sum, accepting proposals that fall short of the brief, or failing to report that a project is slipping. Public liability insurance does not respond to those losses. Professional indemnity (PI) insurance does, where they result from negligence in your professional services.
RICS practice information adds a nuance. Although the employer’s agent is bound to the employer, it says the agent should act impartially in valuation, claims and certification. You can therefore be criticised by your client for not protecting it, while your decisions are challenged by the contractor in adjudication as partial.
The examples below are illustrative. They describe the kind of allegation employer’s agents face; they are not real claims or outcomes.
Each scenario alleges that you fell below the standard of a competent employer’s agent, and that the client lost money because of it.
A claim against an employer’s agent is usually argued from three places: the building contract, the Construction Act’s payment rules, and RICS’s description of what the role involves.
| Reference | What it says | Why it matters for your PI |
|---|---|---|
| JCT Design and Build Contract 2024 | The current JCT design and build form: the contractor completes the design and carries out the works, priced as a lump sum with interim stage or periodic payments, with provision for bonds and collateral warranties. | Your valuations, notices and reports all operate inside it. |
| Housing Grants, Construction and Regeneration Act 1996, s.110A | The contract must require the payer or a specified person, or alternatively the payee, to give a payment notice no later than five days after the payment due date, stating the sum considered due and how it was calculated. | Producing that notice is often the employer’s agent’s job. |
| HGCRA 1996, s.111, as substituted in 2009 | The payer must pay the notified sum by the final date for payment, unless a pay less notice is given within the prescribed period before that date, stating the sum considered due and its basis. | A late or defective notice can cost the client its right to withhold. |
| Scheme for Construction Contracts (England and Wales), Part II, para 10 | If the parties have not agreed the period, a pay less notice must be given no later than seven days before the final date for payment. | The fallback deadline when a contract is silent. |
| RICS, Employer’s agent: design and build | Practice information, first published as a guidance note in 2017 and reissued in September 2024, covering the role, competence and appointment. It says the agent should act impartially in certification and decision-making, and that liability for errors in Employer’s Requirements the agent prepares falls on the agent. | Likely to be used as the benchmark of a competent employer’s agent, whether or not you are RICS-regulated. |
| Usually covered by PI | Often excluded or limited | Needs a different policy |
|---|---|---|
| Negligent valuations and payment advice | Guarantees of cost or programme outcomes | Injury or damage during site visits (public liability) |
| Late, missing or defective payment and pay less notices | Obligations beyond reasonable skill and care, such as fitness for purpose | Injury to your own staff (employers’ liability) |
| Errors and omissions in Employer’s Requirements you prepare | Design liability, if you start designing for the contractor | Claims against your directors for running the firm (directors’ and officers’ liability) |
| Failing to report progress, defects or risks accurately | Services outside your declared activities, such as quality inspections you are not qualified to carry out | Attacks on your own systems and data (cyber insurance) |
| Defence and adjudication costs, including expert evidence | Circumstances you knew about before the policy began | Recovering your own unpaid fees (legal expenses insurance) |
Cover is always subject to the insurer’s acceptance and the policy terms. RICS’s practice information itself warns that an employer’s agent carrying out quality inspections it is not qualified for may invalidate its PI, so keep your declared activities and your actual services aligned.
The most common way an employer’s agent turns a contractor’s problem into its own is a payment deadline. Under the Construction Act, once a sum has been notified the payer must pay it by the final date for payment unless a valid pay less notice was given in time. If the notice is late, missing or does not state the basis of the calculation, the contractor can usually enforce the notified sum quickly through adjudication, and your client loses the use of money it was entitled to hold back.
The design and build contract sets its own dates, and the Scheme supplies a seven-day fallback only where the parties have not agreed one, so the timetable you work to is in the contract you administer. Practical steps that prevent most of these claims:
Employer’s agents come from quantity surveying, building surveying, project management and architecture. Many are not RICS-regulated, and the rules on PI depend on who regulates you.
Regulatory minimums are floors. The limit a client or funder asks for, tied to the contract value, is often higher.
Your appointment usually sets the figure, and funders and purchasers often add collateral warranties that let them claim against you directly. Check whether the limit must apply to each and every claim or in the aggregate, how long cover must be maintained after practical completion, and whether the appointment caps your liability.
PI is claims-made. The policy that answers an allegation about a valuation you made in 2026 is the one you hold when the claim is made, which may be many years later. Keep cover continuous, and if you retire or close the practice, arrange run-off for at least as long as your appointments and any regulator require. See run-off cover explained and collateral warranties and PI.
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Apex Insurance Brokers is an independent insurance broker based in Bristol, established in 2009 and authorised and regulated by the Financial Conduct Authority. We are not tied to one insurer: we work with over 30 markets, including Lloyd’s syndicates through wholesale brokers, and every client has a named broker who handles the placement, mid-term changes, certificates for clients and the renewal.
Yes. An employer’s agent values work, issues notices, reviews proposals and reports to the client, and mistakes in any of those cause financial loss rather than injury or damage. PI is designed for that kind of claim, and clients and funders usually require it in the appointment.
No law requires it for employer’s agents as such. RICS-regulated firms must hold PI meeting RICS requirements, architects must hold adequate PI under the Architects Code, and CIOB members must be adequately insured for risks relevant to their work. Employer’s agents outside those bodies have no regulatory requirement, but clients and funders usually ask for PI.
Usually, where the employer suffers loss because you negligently failed to serve a valid notice in time, subject to the policy terms. The loss claimed is typically the sum the employer could have withheld and the cost of any adjudication. Check whether your appointment makes you or the client responsible for serving notices.
If you prepared them, you may be. RICS practice information says that where the employer’s agent prepares the Employer’s Requirements and they do not correctly reflect what the employer requires, liability for the errors or omissions falls on the agent. Define your role in the appointment and get the client to sign off the brief.
PI may respond to a claim that your negligent valuation led the employer to overpay, subject to the policy terms. Underwriters look closely at how you value work in progress and materials off site, so keep records of what you checked and why you included each item.
For RICS-regulated firms the minimum depends on turnover: £250,000 for turnover of £100,000 or less, £500,000 for turnover up to £200,000, and £1 million above that. Clients and funders often ask for more, linked to the contract value, so check the appointment before you sign it.
Apex arranges professional indemnity insurance for employer's agents across the UK. Tell us about your work and we’ll find cover that fits. Or call 0117 325 0027.
Start your PI proposal Call 0117 325 0027Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales, company number 07014570. This page is general information, not advice on your individual circumstances. Cover is always subject to the insurer’s acceptance and the policy terms, and this page does not guarantee that cover will be available or on what terms.
