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Engineers · design & build
Design-and-build work changes an engineer’s professional indemnity exposure — the contractor becomes your client, liability is passed down the chain, and a single clause can leave you carrying a risk your policy will not pay. This page sets out the traps specific to design-and-build and design-and-construct engineering, and how to make your cover match the contracts you actually sign.
Part of: Professional indemnity at Apex
In short
Design-and-build (D&B) and design-and-construct (D&C) engineers face professional indemnity risks a standard consulting appointment does not. The central trap is fitness for purpose: PI covers reasonable skill and care and almost always excludes fitness-for-purpose obligations, yet design-and-build contracts routinely try to pass that absolute standard down to the design team — leaving an uninsured liability. Collateral warranties widen who can sue you, the absence of a net contribution clause can make you liable for the whole of a multi-party loss, and novation can change who you owe duties to mid-project. PI is claims-made, so your retroactive date and run-off must cover a long tail that the Building Safety Act 2022 extended to 30 years for older work and 15 for newer. Engineers have no regulatory minimum limit; it is set by your contracts, and should be matched to the most demanding of them.
This page is for consulting engineers working on design-and-build (D&B) and design-and-construct (D&C) projects — civil, structural, geotechnical, mechanical, electrical and building-services engineers who carry design responsibility on projects where a contractor, rather than the employer, holds the contract to both design and build the works.
You might be engaged directly by a main contractor, sit within a contractor’s design team, be novated across to the contractor having started for the employer, or act as a sub-consultant further down the chain. However you are appointed, the common thread is that your design feeds a single-point-responsibility contract — and that changes your professional indemnity exposure in ways a standard consulting appointment does not.
On a traditional appointment, an engineer is engaged by the employer to exercise reasonable skill and care — the ordinary professional standard, and the standard your PI policy is built around. Design-and-build rearranges that relationship, and most of the PI pitfalls follow from the change.
The risk is rarely the engineering; it is the contract. A design-and-build engineer can do excellent work and still carry uninsured liability because of what they signed. The sections below are the traps a broker checks before you commit.
This is the single most important thing to understand about design-and-build PI. A standard professional indemnity policy covers your liability for failing to exercise reasonable skill and care. It does not cover a fitness-for-purpose obligation — an absolute promise that the finished works will achieve a particular result or be fit for the employer’s stated purpose, however carefully you worked.
Design-and-build contracts frequently impose fitness for purpose on the contractor, and the contractor’s sub-consultancy agreements and collateral warranties then try to pass that same absolute standard down to the design team. Sign up to it, and you have taken on a liability your insurer will not meet.
| Reasonable skill and care | Fitness for purpose |
|---|---|
| The ordinary professional standard: did you work as a competent engineer would? | An absolute result: the works must achieve the stated purpose, full stop. |
| What your PI policy is built to cover. | Routinely excluded by PI policies — an uninsured liability. |
| Fault-based: the claimant must show you fell short. | Outcome-based: it is enough that the result was not achieved. |
| The right standard for your appointment and warranties. | To be resisted, capped or removed before you sign. |
The practical answer is not to refuse every design-and-build job; it is to make sure your appointment, your collateral warranties and any design obligations are limited to reasonable skill and care, so that what you promise matches what your PI policy will actually pay. A broker who reads construction wordings flags a fitness-for-purpose clause before it becomes an uninsured claim.
Two further contract features decide how far your exposure runs, and both are routine on design-and-build work.
Collateral warranties and third-party rights. You will be asked to give collateral warranties — or their modern equivalent, third-party rights schedules — to the employer, funders, purchasers and tenants. Each one adds another party who can bring a claim against you, sometimes years after completion. The wording matters: a warranty should carry a “no greater liability” clause, so you owe a beneficiary no more than you owe under your main appointment, and its obligations should stay within reasonable skill and care. Your PI can respond to liabilities assumed under a warranty, but only where they would have existed anyway in negligence — not where the warranty has quietly widened them.
Net contribution clauses. On a multi-party project the default legal position is joint and several liability: if another member of the team is also at fault but has become insolvent or is uninsured, you can be pursued for the whole loss, not just your share. A net contribution clause limits your liability to the proportion fairly yours. Insurers strongly favour them, and their absence is one of the first things a specialist broker will raise.
Design-and-build projects often begin with the employer appointing the design team to develop the scheme, then novating those consultants across to the contractor once the building contract is let. Overnight, the engineer who designed for the employer is contracted to the contractor — frequently under a novation agreement that deems the engineer to have acted for the contractor from the outset.
That switch carries real PI consequences: you may owe duties to both the original employer (for the pre-novation work) and the contractor; the novation wording can expand what you are deemed to have promised; and the cover that responds to a claim is the policy in force when the claim is made, not when you did the design. A broker checks the novation terms, confirms your retroactive date reaches back over the pre-novation work, and makes sure nothing in the deed commits you beyond reasonable skill and care.
Professional indemnity is written on a claims-made basis: the policy that responds is the one in force when a claim is made against you or when you notify a circumstance — not the policy you held when you did the work. For construction, where defects can surface many years after completion, three things follow.
The long tail has grown dramatically. The Building Safety Act 2022 extended the limitation period for claims under the Defective Premises Act 1972 to 30 years for work completed before 28 June 2022, and 15 years for work after it — so a traditional six-year run-off now covers only a fraction of the window in which an engineer can be pursued. For structural, civil and façade engineers in particular, this is the exposure that most often needs re-examining. See our note on the section 135 limitation extension.
Unlike solicitors or surveyors, engineers have no single regulatory minimum PI limit. Chartered bodies such as the ICE, IStructE and CIBSE expect members in practice to hold adequate cover, but the limit you actually need is driven by your contracts, not a rulebook. Three things set it:
Matching the limit, the basis and the exclusions to your actual contracts — rather than renewing last year’s policy unexamined — is the core of getting design-and-build PI right.
It is worth asking us to re-market your cover when:
We would rather tell you plainly than waste your time. We are probably not for you if:
No. Professional indemnity covers your liability for failing to exercise reasonable skill and care, and it routinely excludes fitness for purpose — an absolute promise that the works will achieve a result. If your appointment or a collateral warranty imposes fitness for purpose, that liability is uninsured. The answer is to limit your design obligations to reasonable skill and care before you sign.
It limits your liability to your fair share of a loss, rather than leaving you jointly and severally liable for the whole of it when another party is insolvent or uninsured. Insurers strongly favour net contribution clauses, and their absence materially increases your exposure on a multi-party project.
Check that the novation does not deem you to have owed the contractor more than reasonable skill and care, that your retroactive date covers the pre-novation design, and that you understand which duties you still owe the original employer. A broker reads the novation deed alongside your PI wording so nothing commits you beyond what the policy will pay.
There is no regulatory minimum for engineers; the limit is set by your contracts. It must meet the highest limit required across your live projects, on the basis — each-and-every-claim or in the aggregate — that those contracts demand. Chartered bodies expect adequate cover but do not set a single figure.
Because PI is claims-made, the policy that responds is the one in force when a claim is made, not when you did the work. Your retroactive date must reach back over all your past design, and you should avoid any gap in cover, or historic projects can be left with no policy to respond.
Yes, significantly. The Building Safety Act 2022 extended the limitation period for Defective Premises Act 1972 claims to 30 years for work completed before 28 June 2022 and 15 years for work after it. A traditional six-year run-off now covers only a fraction of that window, so run-off and retroactive dates need re-examining, especially for structural, civil and façade engineers.
Often only in a restricted form. Since Grenfell many PI insurers apply fire-safety and cladding exclusions, particularly for work on external wall systems, combustible materials and higher-risk buildings. If your work touches these, the exclusion wording needs checking carefully, because it can remove exactly the cover you most need.
Yes. Our Non-Standard PI Desk handles claims, circumstances, declinatures and other difficult cases, and works to a published standard of a straight answer within five working days of our having the documents we ask for. Being open about the history is what lets us present it properly to an insurer with appetite for it.
Send us your appointment, any collateral warranties and your current schedule, and a named broker will check the fitness-for-purpose, net contribution and retroactive-date points and set out the market — usually three or four competing quotes, compared like for like. Or call 0117 325 0027.
Get a quote Request a callbackApex 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 about professional indemnity insurance, not advice on your individual circumstances, and it does not guarantee that cover will be available or on what terms.
