- Project plans
- Project activities
- Legislation and standards
- Industry context
Last edited 01 Aug 2018
Professional indemnity insurance life cycle
As a business evolves, its requirements for professional indemnity insurance (PII) are likely to change. PII requirements should therefore be reviewed regularly as a business develops.
 Starting a business
A start-up business will need to consider a policy that covers:
- Any previous business (if there is a past business that needs to be covered).
- All of the activities that the business is engaged in.
- Any actions brought against the business due to breach of statute.
- Staff actions that may result in a claim.
 A growing business
As a business grows it may be asked to sign collateral warranties. The business must make sure it is covered for all the responsibilities it is being asked to accept. The insurer should be able advise what changes need to be made to an agreement, and where it goes beyond what is covered in the existing policy.
Cyber cover is an increasingly important element of PII and a business should make sure it is covered for matters such as:
- Accidental breach of GDPR.
- The costs of notifying aggrieved parties of a breach.
- Claims arising from a company’s website being hacked.
When a business takes on larger clients it can be asked to hold 12 years cover for a specific project. In this instance, it is very important to keep a good record of projects and to consider how long the business is likely to be trading.
If a business has a reputation for innovative designs it may be worth considering protecting intellectual property. This will help fund, for example, the costs of pursuing an ex-staff member trying to copy a design.
 Selling a business
 Dissolving a business
 Retiring from a business
When a partner retires from a practice that is still trading, usually the insurance will cover the partner’s past work. If the retirement results in the practice ceasing to trade then run off cover of 6-7 years is usually purchased. This is usually renewable annually with the premium reducing by around 12-15% every year. Sometimes it is possible to buy a block multi year policy but this is quite rare.
--Custodian Insurance 12:12, 26 Apr 2018 (BST)
 Find out more
 Related articles on Designing Buildings Wiki
- Collateral warranties.
- Contractors' all-risk insurance.
- Directors and officers insurance.
- JCT Clause 6.5.1 Insurance.
- Making sure your builder has appropriate insurance.
- Professional indemnity insurance PII.
- Professional Indemnity Insurance clause in conditions of engagement.
- Run-off cover for professional indemnity insurance.
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