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Reviewed by Matthew Bartlett, Director ยท Last reviewed 2026-06-22
The Biodiversity Net Gain (BNG) requirement under section 90A of the Town and Country Planning Act 1990 (inserted by Schedule 14 of the Environment Act 2021) became mandatory for most planning applications in England in February 2024 and for nationally significant infrastructure projects in November 2025. The requirement is that most new developments deliver a 10% net gain in biodiversity value, measured against the statutory biodiversity metric published by Natural England. For the ecologists and environmental consultancies that produce those assessments, the mandatory nature of the requirement changed the risk picture: an assessment that was previously advisory now sits on the critical path of a planning consent, and an error in it can carry a quantifiable financial consequence for the developer. That is the mechanism by which a technical mistake becomes a professional indemnity claim, and it is the reason limit-setting and policy scope now deserve close attention at renewal.
The statutory biodiversity metric (currently version 4 in routine use) translates habitat types, condition and area into biodiversity units. The metric is a spreadsheet-based tool with detailed rules on habitat classification, baseline assessment and post-development calculation. Errors at any stage feed through into the final unit count. A miscount or misclassification on baseline can over- or under-state the net gain by a margin large enough to make the development non-compliant.
The calculation is sensitive at several points. Habitat condition is scored against published criteria, and an assessor who records a parcel as “good” where the evidence supports “moderate” inflates the baseline. Distinctiveness bands, connectivity and strategic significance multipliers each compound through the arithmetic, so a single classification error rarely stays small — it is multiplied across the affected area. The metric also applies risk multipliers for the difficulty of creating or enhancing a habitat and for the time it takes to reach target condition; mis-stating those inputs changes how many units a proposed enhancement is credited with. Because the tool is a closed spreadsheet with fixed formulae, the discipline that protects the consultant is not the arithmetic but the evidence behind each input: survey records, condition photographs, and a clear audit trail from field data to the figure that reaches the planning authority.
BNG assessments are typically prepared by ecologists, often working within environmental consultancies. The work is undertaken under the IEMA Code of Practice and, where the assessor is a chartered ecologist, under the standards of the Chartered Institute of Ecology and Environmental Management (CIEEM). Both bodies publish technical guidance on metric application. The professional standing of the individual matters to the PI position: an assessment signed by a competent person, prepared in line with the relevant guidance and supported by a contemporaneous record, is far more defensible than one where the methodology cannot be reconstructed after the event. Insurers underwriting ecology-led consultancies increasingly ask about the qualifications of the people doing metric work and the firm’s internal review process before a report is issued.
A metric error has three potential consequences for the consultant:
In each case the claim is framed in negligence and, where there is a written appointment, breach of contract. The measure of loss is the developer’s financial position had the assessment been correct — typically the additional cost of achieving compliance by another route, plus wasted expenditure and, in delay cases, holding costs on the site. What the developer generally cannot recover is a loss they would have suffered anyway had the correct advice been given at the outset; the consultant’s exposure is the difference the error made, not the whole cost of compliance. This is why the contemporaneous record is so important: it is often the document that separates a defensible judgement call from an indefensible mistake.
Professional indemnity cover for an environmental consultant responds to civil liability arising from a negligent act, error or omission in the professional services the firm provides. For BNG work that includes the metric calculation itself, the survey work that feeds it, the advice on how to secure and deliver the gain, and the ongoing advice through the monitoring period. Most policies are written on a claims-made basis, so it is the policy in force when the claim (or a circumstance likely to give rise to one) is notified that responds — not the policy in force when the assessment was prepared. Cover typically extends to the legal costs of defending the claim as well as any damages, and reputable wordings include the cost of investigating and mitigating a circumstance before it hardens into a claim. Consultants should read the wording for how it treats sub-consultants and associates, any exclusion or condition relating to survey timing and seasonality, and whether documentation or record-keeping obligations are made a condition of cover. Deliberate acts, known circumstances not disclosed at inception, and liabilities assumed under contract that go beyond the common-law duty of care are the areas where cover most often falls away.
There is no single compulsory limit for environmental consultancy in the way that some regulated professions face a prescribed minimum. The limit is set by reference to the exposure the firm actually carries, and for BNG that exposure is driven less by the fee and more by the value of what the assessment underpins. Three questions tend to shape the figure. First, what does the largest client contract require the firm to carry? Development agreements and consultancy appointments frequently specify a minimum level of PI cover to be maintained for the life of the obligation, and the firm must at least meet the most demanding of those. Second, what is the realistic worst-case financial consequence of an error on the firm’s largest or most sensitive scheme — the cost of remediating a shortfall through off-site units, delay costs, or an alternative compliance route? Third, how many schemes share the same methodology or the same assessor, because a single systematic error in the way the firm applies the metric could surface across multiple projects at once and aggregate against the limit.
That aggregation point is the one most often under-weighted. A firm that runs its metric calculations to a house method, and later finds that method was flawed, may face several notifications that the policy treats as related. Whether they erode one limit or several depends on the aggregation language in the wording, which is why the limit and the way claims aggregate should be considered together rather than in isolation. Our environmental consultants PI insurance guide covers the BNG, statutory biodiversity metric and IEMA position in detail, including how insurers are treating the limit-setting question for ecology-led consultancies and the practical points to consider at renewal.
Section 100 of the Environment Act 2021 and the related secondary legislation require BNG to be secured for at least 30 years through a conservation covenant or a section 106 planning obligation. A consultant’s assessment that gets the maintenance cost wrong on day one creates a 30-year drag on the developer’s project economics. PI cover responds to the negligence-based claim; the 30-year horizon means the claim notification window may be a long one.
For a claims-made book that long tail has a practical consequence: the firm needs cover in place not only in the year the assessment is written but continuously through the period in which a latent error might come to light, and after the firm stops trading it will usually need run-off cover to remain protected. A shortfall that only becomes apparent when a habitat fails to reach target condition several years into the monitoring period is precisely the kind of claim that arrives long after the fee has been invoiced and forgotten.
Consider a baseline survey carried out late in the season that under-records a species-rich grassland, so the metric treats a valuable habitat as lower distinctiveness. The scheme is consented on that basis; a re-survey the following spring shows the true baseline, the net gain calculation no longer holds, and the developer has to redesign the mitigation. The claim is for the redesign cost and the delay. PI cover responds to the alleged failure to survey competently and to qualify the assessment for seasonal limitation.
In a second scenario the metric is applied to a superseded version, or a strategic significance multiplier is misapplied, over-stating the gain. The application is granted but a post-completion condition requires evidence the gain has been delivered; it has not, and the developer buys off-site units at market rate to close the gap. The claim is the cost of those units plus enforcement exposure. Here the defence turns on whether the input error was a reasonable judgement or a departure from published guidance, and on whether the report clearly recorded its assumptions.
BNG sits within a wider environmental regulatory framework. The Environment Act 2021 also introduces the Office for Environmental Protection (OEP), conservation covenants under part 7, and updated environmental impact assessment regulations. Consultants advising on EIA, habitats regulations assessment under the Conservation of Habitats and Species Regulations 2017, or contaminated land under part 2A of the Environmental Protection Act 1990 face parallel claim mechanics: a methodology error in the assessment, a regulatory consequence, and a downstream claim from the developer or operator. A firm whose work spans several of these regimes carries a broader exposure than its BNG work alone would suggest, and its PI programme should reflect the full range of services it actually provides rather than the single service that happens to be busiest.
The statutory metric has gone through several versions since launch. A consultant using the wrong version, or using a version that has been superseded between baseline survey and submission, may produce an assessment the planning authority will not accept. Version control on the metric input, the survey data and the calculation worksheet is part of the contemporaneous record that supports a PI defence if a claim follows. In practice the firms that defend claims most successfully are those that can produce, for any given report, the exact metric version used, the survey data behind each input, the internal review sign-off, and the assumptions and limitations stated to the client at the time.
Where a consultant identifies a metric error after submission, prompt notification to the PI insurer protects the cover position. The duty of fair presentation under the Insurance Act 2015 applies at renewal; circumstances known to the firm at renewal time should be disclosed. Notifying a circumstance is not an admission of liability and does not by itself affect the claims record in the way a paid claim would; on a claims-made policy it fixes the notification to the current year’s cover, which is generally to the firm’s advantage. The greater risk is saying nothing, discovering later that the circumstance was known, and finding the current insurer declines it as a matter that should have been notified before the policy incepted.
There is no single statutory minimum limit prescribed for environmental consultancy in the way some professions face one. In practice cover is effectively required by client contracts and by professional expectations, and appointments frequently specify a minimum level of PI to be maintained. The right limit is the one that meets the most demanding contract and covers the firm’s realistic worst-case exposure.
PI is almost always written on a claims-made basis, so it is the policy in force when the claim or circumstance is notified that responds, not the one in force when the report was written. Given the 30-year management horizon for BNG, continuity of cover — and run-off cover if the firm stops trading — matters more here than in many other fields.
Where the developer’s recoverable loss includes the cost of acquiring off-site units to make good a shortfall caused by the consultant’s negligence, that loss can fall within the damages the policy responds to, subject to the limit, the excess and the wording. Cover is for the firm’s legal liability for the loss, not a guarantee of the assessment’s outcome.
Start from the largest contractual PI requirement the firm has agreed to, then test it against the worst realistic financial consequence of an error on the firm’s largest scheme and against the possibility that a systematic methodology error surfaces across several projects and aggregates. A broker who understands the sector can benchmark the figure against comparable consultancies.
The metric version used, the underlying survey data and dates, condition scoring evidence, the internal review sign-off, and a clear statement to the client of the assumptions and limitations of the assessment. A report whose figures can be traced back to contemporaneous evidence is far more defensible than one that cannot.
Apex Insurance Brokers serves UK professional services firms and commercial businesses. Call 0117 325 0027, email info@apexinsurancebrokers.co.uk, or request a quotation.
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