This case study is an anonymised composite based on publicly reported PI claim patterns. It is not actual Apex client data and does not constitute legal or insurance advice. Names, locations and identifying details have been changed. Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority, FRN 724952.
A mid-sized design and build contractor with annual turnover around £85m, operating across the north of England on commercial, education and light industrial projects. The contractor maintained its own in-house design management function with a team of approximately fifteen technical staff, supported by external designer panels on specific project elements.
The project was the design and construct of a new distribution warehouse for a logistics client — a 14,000 m² portal-frame warehouse with two-storey integrated office accommodation at one end. The contract was a standard JCT Design and Build Contract with the contractor taking design responsibility for the full scheme.
The design team was a hybrid: the contractor’s in-house team managed the overall design coordination; the structural design (portal frame and office) was sub-contracted to a specialist structural designer; the M&E design was sub-contracted to a separate consultancy; the office architecture was undertaken by a third sub-consultant. The steelwork was procured from a specialist steelwork sub-contractor that undertook the connection design under a “Designed Portion” within its sub-contract — a common arrangement in single-storey warehouse work.
The issue arose at the interface between the warehouse portal frame and the integrated office. The portal frame structural designer’s drawings showed the abutment between the warehouse and the office at a particular elevation and with a particular detail; the office structural designer’s drawings showed the same interface at a slightly different elevation (approximately 80mm lower) and with a different detail; the steelwork sub-contractor’s working drawings — informed by both designers’ outputs — interpreted the interface in a way that did not match either designer’s intent. The contractor’s own design coordination function had not picked up the inconsistency at the design review stage.
The error was identified during steel erection when the office steelwork did not align with the warehouse cladding rail layout. Rework was required; certain steel sections needed re-cutting and re-fabrication; the cladding sub-contractor’s programme was disrupted; the project programme slipped by approximately five weeks.
The client did not pursue the contractor under the contract — the contractor managed the issue within its own resources rather than passing the disruption to the client — but the contractor incurred substantial direct costs and looked to recover these from the sub-consultants.
The contractor’s claim was framed in negligence and breach of contract against the structural designer (portal frame), the office structural designer, and the steelwork sub-contractor for the connection-design interpretation. The pleaded loss was the rework cost, the consequential delay-related preliminaries cost on the contractor’s own organisation, and a contribution to the cladding sub-contractor’s disruption.
Pleaded loss against the three parties combined was approximately £580,000. The contractor’s own design coordination function’s potential contribution to the issue was acknowledged in the pleadings but contested on the basis that the design coordination role was to identify divergences for resolution by the responsible designers, not to substantively redesign the interface.
The matter resolved through a multi-party negotiation at approximately £380,000 distributed across the three responsible parties (each carrying its own PI cover), with the contractor absorbing the balance.
This case study focuses on the position of the portal frame structural designer, whose share of the settlement was approximately £165,000.
Section 5 notification was made on receipt of the contractor’s pre-action correspondence. The wording responded subject to the firm’s £20,000 excess. The £3m limit was sufficient.
A coverage question arose on the collateral warranty framework. The structural designer had provided a collateral warranty to the client; the contractor’s claim, as a direct contractual claim under the appointment between the contractor and the designer, was the matter on which the wording responded. The collateral warranty to the client was a separate exposure that, on the facts, was not engaged because the client had not directly claimed.
A second question arose on the interfaces and coordination characterisation. The designer’s defence engaged the point that the responsibility for design coordination across multiple sub-consultants sits with the lead designer — typically the contractor’s in-house design management function on a D&B contract — and not with each sub-consultant individually. This is a real and important point in any multi-party design dispute on a D&B project. The wording responded to the designer’s actual liability after the coordination apportionment was settled.
A third question arose on the delay-related loss treatment. The contractor’s claim included a substantial element of programme-related preliminaries. The wording responded to losses arising from professional negligence including consequential losses; some D&B-supplier PI wordings exclude or sub-limit delay-related losses specifically, and the renewal review on this point is important for sub-consultants working on D&B projects.
The matter resolved at approximately £165,000 against the structural designer inclusive of contribution to the contractor’s costs. The £20,000 excess applied.
The settlement was paid. The structural designer reviewed its interface and coordination protocols. The principal change was an explicit interface schedule maintained by the designer on every D&B project, with the designer flagging interfaces with other disciplines explicitly to the lead designer and requiring written confirmation that the interface had been coordinated before the designer’s drawings were issued for construction. The designer’s PI premium rose by approximately 22% at renewal.
D&B sub-consultant claims have a distinctive multi-party character. First, the design coordination role on a D&B project sits with the lead designer (typically the contractor’s in-house function or a dedicated lead consultant), but each sub-consultant has a duty to flag interfaces with other disciplines actively rather than passively. Second, the firm’s PI wording’s treatment of consequential and delay-related losses is the substance of the renewal review for D&B sub-consultants. Third, the collateral warranty framework on D&B projects creates exposure to the ultimate client in parallel to the contractual relationship with the contractor; the wording should respond to both pathways. Fourth, the file evidence of interface coordination communications is the most important documentation in any D&B coordination dispute; the firm’s process should make these communications systematic and recoverable. Fifth, the renewal narrative on the firm’s D&B engagement model and the interface management protocol is the substance of the underwriter’s view.
For sub-consultants working substantially on D&B projects, the wording analysis at renewal is the most important conversation — particularly on consequential loss, delay loss and collateral warranty treatment. On notification, the framing of an interface dispute through the lens of professional negligence by the responsible designer (rather than as a multi-party blame-allocation exercise) requires care and the broker’s role in coordinating with other parties’ insurers can materially affect outcomes. At renewal, the firm’s revised interface management protocol and the documented flagging-and-confirmation evidence are the documents that earn the underwriter’s confidence.
Apex Insurance Brokers serves UK professional services firms and commercial businesses. Call 0117 325 0027, email hello@apexinsurancebrokers.co.uk, or request a quotation.
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