Behind every professional appointment sits a question that is easy to overlook until something goes wrong: did the professional promise a particular outcome, or only to work carefully towards one? The answer decides how a claim is judged and whether the PI policy responds.
The starting point for professional services in England and Wales is that the professional owes a duty to exercise reasonable skill and care. This is a fault-based standard: the client must show that the professional fell below the standard of a reasonably competent practitioner in that field. The obligation is codified for services supplied in the course of a business by section 13 of the Supply of Goods and Services Act 1982, which implies a term that the supplier will carry out the service with reasonable care and skill.
A solicitor is not liable simply because advice turned out to be wrong; the question is whether a reasonably competent solicitor would have given the same advice on the same information, which requires expert evidence. The concept is developed further at the reasonable-competence standard for UK professions and at SGSA 1982 section 13.
Strict liability does not depend on fault. If the professional has promised a specific result and the result is not delivered, liability follows regardless of how carefully the work was performed. It can arise in three main ways:
The leading design-and-build authority is Independent Broadcasting Authority v EMI Electronics Ltd (1980) 14 BLR 1. The House of Lords held that a contractor supplying a design-and-build package could be liable for fitness for purpose even without an express warranty, because the client was relying on the supplier to deliver a working end product. A design-only professional will not usually attract the same implied term, but the boundary is not always tidy.
Earlier, in Greaves & Co (Contractors) Ltd v Baynham Meikle & Partners [1975] 1 WLR 1095, the Court of Appeal accepted that an engineer could, exceptionally, be under an implied obligation of fitness for purpose. The engineer knew the specific use to which the structure would be put and the client was relying on the engineer to produce something fit for that use. Greaves is not authority for a general rule; it is a reminder that the standard depends on what the professional undertook, not on the label of the discipline.
The duty of good faith in commercial performance recognised in Yam Seng Pte Ltd v International Trade Corp Ltd [2013] EWHC 111 (QB) does not, by itself, convert a reasonable-care obligation into a strict one, but it can inform how promises in correspondence are read.
Professional indemnity policies are written around breach of professional duty – around the fault-based standard. Most wordings exclude, expressly or by narrow definition, liability assumed under warranties, guarantees, or estimates that go beyond reasonable skill and care. A typical clause carves out liability assumed under a warranty, guarantee, or estimate given in respect of a specific result, unless the insured would have been liable in the absence of the warranty.
The practical effect is that a professional who volunteers a guarantee may still be liable to the client for the guaranteed outcome, but the PI insurer may decline to indemnify that part of the exposure. The professional is then paying, personally, for a promise that more careful drafting could have avoided.
Worked example. An architect writes to a client during design development: "The design will comply with fire regulations." The building later fails a fire inspection. If the letter is read as an undertaking to use reasonable skill and care, the client must show that the architect fell below the standard of a reasonably competent architect – expert evidence, discussion of what was reasonable at the time, and so on. If the same letter is read as a warranty of compliance, the architect is strictly liable regardless of the level of care exercised: the promise was of an outcome, and the outcome did not arrive. The PI insurer, faced with the warranty reading, is likely to argue that the strict-liability exclusion applies, potentially leaving the architect uninsured for that aspect of the claim.
Retainer language does most of the work. Apex sees the following patterns hold up well: describing services as "provided with reasonable skill and care" rather than as delivering a specified result; distinguishing "reasonable endeavours" (a genuine but qualified obligation) from "best endeavours" (treated by the courts as significantly more onerous); avoiding phrases such as "we will ensure" or "the design will comply" in favour of "we will design so as to seek compliance with"; and being cautious in emails and meeting notes, which can be read as varying the retainer.
Sector-specific considerations are at the architects' PI guide and the engineers' PI guide.
Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Firm reference number 724952. This entry is general information, not advice on any particular policy.