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 civil and environmental consulting engineering practice with twelve staff in the south-west, fee income around £2.8m, with strong specialisms in coastal infrastructure, water and wastewater engineering, and the environmental assessment work that supports those projects.
The project was a small marine construction project — a replacement waste-water outfall structure approximately 800 metres offshore from an existing pumping station, to replace an end-of-life Victorian outfall. The works engaged a coastal water environment with multiple designated nature conservation interests in proximity: a Site of Special Scientific Interest, a Special Protection Area for overwintering birds, and a Special Area of Conservation under the Habitats Directive (as transposed into domestic law via the Conservation of Habitats and Species Regulations 2017).
The firm was appointed as lead designer and to undertake the environmental assessment work supporting the planning and marine licence applications. The team produced an Environmental Impact Assessment (EIA) addressing the construction-phase and operational-phase impacts on the various designated interests. The assessment was thorough on water quality, marine sediment, benthic ecology and commercial fisheries impacts, and engaged adequately with the bird interest on the basis of summer survey data.
The omission was in the engagement with the Habitats Regulations Assessment (HRA) as a separate statutory process distinct from but parallel to the EIA. The HRA framework requires a competent authority (in this case the Marine Management Organisation) to undertake a screening exercise on whether a project is likely to have a significant effect on a European designated site and, if it cannot rule that out, to conduct an Appropriate Assessment. The firm’s documentation engaged with the EIA framework thoroughly but provided insufficient material for the competent authority to discharge its HRA obligations — specifically because the firm’s bird survey work covered the summer (breeding) season but did not adequately survey the winter (overwintering) season, which was the predominant interest of the SPA designation in this location.
The competent authority issued an “appropriate assessment cannot be completed on available evidence” determination and required a winter season of bird survey before the marine licence could be granted. The project programme slipped by a full year while the additional survey work was undertaken.
The project promoter (a water utility) claimed against the firm for the cost of the additional survey work, the cost of the delay to the project (including additional preliminaries on the construction contract that had been entered into in anticipation of the original programme), and consequential losses. The pleaded loss was approximately £680,000.
The claim was framed in negligence and breach of the firm’s appointment. The defence engaged points around the scope of the firm’s appointment (the appointment described the firm’s work as “EIA support” without explicit reference to HRA), the firm’s reasonable understanding of the documentation the competent authority would require, and the practical reality that the bird survey scope had been agreed with the competent authority’s pre-application engagement. The defence had some force on the last point — but the file evidence of the pre-application engagement was less complete than it should have been, and the competent authority had subsequently taken a different view.
The matter resolved at mediation at approximately £420,000 inclusive of the promoter’s contribution to costs.
Section 5 notification was made on the firm receiving the competent authority’s “appropriate assessment cannot be completed” determination — at the point of crystallised exposure rather than at the later pre-action correspondence. This was the correct timing. The wording responded subject to the firm’s £25,000 excess. The £3m limit was sufficient.
A coverage question arose on the delay and consequential loss treatment. The wording responded to the firm’s liability for the promoter’s losses arising from professional negligence; the wording did not contain a general exclusion for consequential losses, although certain heads (loss of profit, anticipated profit on follow-on contracts) were sub-limited. The claim sat within the headline cover for the substantial part of its quantum.
A second question arose on the regulatory engagement scope. The wording responded to the firm’s professional services including environmental assessment work; the wording did not require the firm’s professional services to be “approved” or “successful” — it covered the conduct of the services to a reasonable standard, regardless of regulatory outcome.
The matter resolved at mediation at approximately £420,000 inclusive of the promoter’s contribution to costs. The £25,000 excess applied.
The settlement was paid. The firm undertook a structured review of its EIA and HRA assessment practice. The principal changes were a clearer documentary scoping of the competent authority’s expected requirements at pre-application stage, a documented HRA screening note on every project regardless of the lead authority’s process, and the introduction of a senior environmental review at the assessment freeze stage. The firm’s PI premium rose by approximately 28% at renewal.
EIA and environmental assessment claims have a slow-burning character — the consequences arise long after the assessment is filed, on the regulator’s response. First, the scope of the firm’s appointment should engage explicitly with the parallel regulatory processes (EIA, HRA, Marine Conservation Zone considerations, Water Framework Directive assessments) rather than collapsing them into a single “EIA support” description. Second, pre-application engagement with the competent authority should be documented in detail; the file is the only evidence of what was agreed and on what assumption. Third, the scope of survey work should be calibrated to the year-round ecological interests of the designated sites, not just to the season convenient for the project programme. Fourth, the firm’s PI wording’s treatment of delay and consequential loss is variable and material on infrastructure project claims; the renewal review should engage with sub-limits and exclusions specifically. Fifth, the renewal narrative on environmental assessment practice should foreground the firm’s pre-application engagement protocol and the year-round survey scoping discipline.
For environmental consulting engineers the wording analysis at renewal is the most important conversation — particularly on consequential loss and project delay exposures, where market wordings vary substantially. On notification, the framing of an assessment-omission claim at the point of crystallised regulatory exposure (rather than waiting for litigation) protects the firm against later notification-timing arguments. At renewal, the firm’s revised HRA-screening protocol and the senior environmental review process are the documents that earn the underwriter’s confidence in a specialist environmental practice.
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