What is Design & Construct PI?

Design & Construct cover is required when a firm enters into a project on a Design & Construct basis. This means that not only will the contactor undertake the construction but they will also contract their client with/employer to carry out the design function. The one stop shop approach is becoming more common place for contractors as it does away with the need for the client personally having to appoint the professionals necessary to the contact. The name D&C is derived from the cover being given to the design and consulting department of a contactor. Despite covering contractors this policy is only covering the professional staff performing professional services- Whether it be Design, specification, surveys, supervision of construction, feasibility studies and/or provision of technical information.

IN HOUSE DESIGN – Highest Risk

This is where a design and contracting company have their own in house design team, made up of qualified architects and engineers, these risks will tend to be larger in size.

The typical wording for in-house design exposure under the D and C split will be “Turnover where the company/firm designs and constructs their own design and provides full technical supervision”.

CONTINGENT – Medium Risk

Most SME contractors won’t have architects/engineers on the payroll so a common way of dealing with this is to sub contract these activities to specialist outside firms – this is known as contingent cover. The cover we give is in respect of the contractual responsibility which the contractor has taken on rather than the direct design risk. The CNA wording contains a condition precedent that all subcontractors must hold PI cover either at the same level as our insured or £1M, which is the lesser.

The typical wording for contingent design exposure under the D and C split will either be “Turnover where the company/firm constructs from other’s designs performed on behalf of the company/firm” or “Turnover where the company/firm constructs from other’s design and other’s technical supervision, performed on behalf of the company/firm”.

CONSTRUCTION – Lowest Risk

Despite the name Design and Construct, the policy does not cover pure construction work as this is not deemed a professional service, claims arising from faulty workmanship or materials are also excluded. This is often a source of contention when a claim arises as it’s not always clear when a claim arises what the cause was.
Construction only work is work undertaken whereby the insured is working to the designs which have been provided by the employer/client/
This work can sometimes be disclosed under the “Other” income on the D&C split. If income has been disclosed under this section a breakdown will need to be obtained as it may include service and maintenance work which would not be covered under a PI policy.

Focus can provide quotations from SME PI business with premiums starting from £350 + IPT. We are looking at quoting risks that fall within the lower risk spectrum of the D&C profession for example electricians, plumber and landscape gardeners. Please see trade list for further clarification. The Insured’s turnover should not exceed £5m.

The Standard D&C wording

Provides cover for any liability caused by negligence, dishonesty of employees, libel and slander, without malicious intent, unintentional infringement of intellectual property rights, unintentional breach of confidentiality & loss of third party documents. This wording covers the actions of sub-contractors but warrants that the sub-contractor must carry their own PI insurance at the same time of engagement.

TRADE LIST

Category A

• Carpenters/Joiners (excluding shopfitters, formworkers)
• CCTV Installation – Commercial and industrial
• CCTV Installation – Domestic
• Commercial Door Entry Systems – installation, repair & maintenance
• Electrical Engineers – lighting, signs & optical
• Electrical Engineers – domestic computers, VDU’s & word processors
• Electrical Engineers – office & business equipment
• Exhibition Stand Designers & Erectors
• Fitted Furniture Installers
• Gutters & Fascia Board Installers
• Kitchen Installers
• Landscape Gardeners
• Landscaping Contractors (commercial)
• Landscaping Contractors (domestic)
• Painters & Decorators- up to 20% commercial
• Painters & Decorators- up to 50% commercial
• Painters & Decorators- up to 75% commercial
• Paving Contractors (domestic)
• Patio Path & Paving
• Property Maintenance
• Public Audio Equipment- Installation and repair
• Shopfitters
• Sign Writers/Erectors
• Timber Decking Contractor
• TV, Radio & Video Installation, Repair & Servicing (domestic only)

Category B

• Builders up to 20% Commercial
• Builders up to 50% Commercial
• CCTV Drainage Inspectors – 1 metre depth
• CCTV Drainage Inspectors – 3 metres depth
• CCTV Drainage Inspectors – 5 metres depth
• Ceilings and Partitions
• Drainage Contractors – 1 metre depth
• Drainage Contractors – 3 metres depth
• Drainage Contractors – 5 metres depth
• Dry Stone Wall Construction & Repair
• Electricians- up to 20% commercial
• Electricians- up to 50% commercial
• Fencing Contractors
• Fencing Contractors excluding Motorways
• Paving Contractors (commercial)
• Paving Patio and blockwork contractors
• Plasterers & Artexers
• Plasterers and Dry Liners
• Plaster, Dry lining & suspended Ceiling contractors
• Plumbing (ex Heating Engineers)
• Plumbing (incl Heating Engineers)
• Plumbers – including Heat
• Plumbers – excluding Heat
• Roughcasters – domestic only
• Scaffolders
• Shelving & storage racking contractor- 10m height limit
• Shutter, Door & Shop Front Protection Installation
• Steel/Metal- fencing/Barriers
• Telecommunications installer- domestic only
• Thermal Insulation Installer
• Tiling Contractors- PDH’s shops, offices, pubs and hotels up to 2 storeys plus attic
• Tiling contractors other than above

Category C

• Builders > 50% Commercial
• Builders – Timber frame buildings
• Electricians- up to 75% commercial
• Non-structural steel fixing (light industrial)
• Pipe Laying- Excl Heat
• Pipe Laying- Incl Heat
• Refrigeration/Ventilation/Air Con Engineers
• Sports Surfaces (synthetic & natural) installation, maintenance & repair- 1m depth
• Sports Surfaces (synthetic & natural) installation, maintenance & repair- 3m depth
• Sports Surfaces (synthetic & natural) installation, maintenance & repair- 5m depth
• Sports Turf & Amenity Areas- construction, drainage & installation- 1m depth
• Sports Turf & Amenity Areas- construction, drainage & installation- 3m depth
• Sports Turf & Amenity Areas- construction, drainage & installation- 5m depth
• Telecommunication installers – commercial
• Ventilation & Air Condition Engineers