Professional indemnity cover: what to check before you appoint
A consultant's insurance is the only thing standing between a defective report and your own balance sheet. Check the certificate, the basis of cover and the cap before work starts.
Professional indemnity cover for a planning consultant or technical author is written on a claims made basis. The policy that responds to a claim is the one in force when the claim is notified, not the one in force when the report was written. Everything else about checking insurance follows from that single fact, and it is the fact most developers discover at the worst possible moment.
Ask for the certificate before work starts. Read four things on it: the insured entity, the policy period, the limit of indemnity, and whether that limit applies to each and every claim or to an annual aggregate. Then ask two questions the certificate will not answer.
Why the cover matters more than the fee
A contaminated land report costing £4,000 can sit underneath a remediation strategy, a foundation design and a sale. A flawed transport assessment can cost a scheme its access. The fee bears no relationship to the loss.
So the commercial logic runs backwards from most procurement. You are not buying a document. You are buying a document plus a covenant to put things right if it is wrong, and the covenant is only worth what the insurance behind it is worth.
Which means the cheapest quote in a tender can be the most expensive outcome. A sole practitioner with £250,000 of cover producing the ground investigation interpretation for a 40 unit scheme is a risk being carried by you rather than by them, whether or not anyone has said so out loud.
Level of cover against the risk carried
Set the level against consequence rather than against fee or firm size.
| Discipline | Typical downstream exposure | Question to ask |
|---|---|---|
| Ground investigation and contamination | Remediation cost, foundation redesign | Limit, and any exclusion for pollution |
| Transport and highways | Access redesign, loss of permission | Limit, and cover for design as well as advice |
| Ecology and biodiversity | Programme delay across a survey season | Limit, and whether licence work is covered |
| Fire engineering | Redesign, Gateway refusal, remediation | Fire safety exclusions, stated explicitly |
| Structural and geotechnical | Rebuild cost | Each and every claim basis |
Fire is the discipline to interrogate hardest, because the insurance market introduced fire safety exclusions across professional indemnity policies and they have not gone away. A fire engineer with a policy excluding fire safety advice is not carrying the risk you think, which is why competence at Gateway One has to be checked alongside the insurance rather than instead of it.
Claims made policies and run-off
Two consequences of the claims made basis, and both need handling in the appointment.
Continuity. A break in cover, even a short one, can leave a gap for work done before the break. Ask whether cover has been continuous and whether any retroactive date applies, because a retroactive date excludes work done before it.
Run-off. When a firm stops trading, claims can still arrive. Contractual claims can generally be brought within six years of the breach under the Limitation Act 1980, and claims involving latent damage can run longer, with the Latent Damage Act 1986 providing a three year period from knowledge subject to a long stop. A firm that dissolves without run-off cover leaves nothing to claim against, and the individuals behind a limited company usually have no personal liability.
Ask for a stated run-off period in the appointment. Six years is the common ask. Some institutes require their regulated firms to maintain run-off, and where a firm is regulated by one, that is worth confirming rather than assuming.
Liability caps and net contribution clauses
Standard consultant appointments cap liability, and the cap is where the negotiation actually happens.
Caps come in three shapes. A fixed sum. A multiple of the fee, which on a small commission can be trivially low. Or a sum equal to the level of insurance carried, which is the version to aim for. And a cap set at twice a £4,000 fee is not a remedy.
Net contribution clauses sit alongside the cap. They limit the consultant's liability to the proportion a court would attribute to them on the assumption that every other responsible party has paid their share. If the contractor is insolvent, that share is yours. The clause is standard and it is not unreasonable, and it does mean you should check that every consultant on the job is on comparable terms, so no party ends up carrying a disproportionate share by accident.
Read the two provisions together. A generous limit of indemnity with a fee multiple cap gives you the cap, not the limit.
Reliance by a funder or purchaser
Your appointment gives you rights. It gives nobody else any.
So decide at the outset who else will need to rely on each report. A lender at drawdown. A purchaser at sale. An incoming joint venture partner. A registered provider taking the affordable units. Then put the mechanism in the appointment.
Reliance letters are the light touch route: a short letter from the consultant confirming a named third party may rely on a named report, sometimes with its own cap. Collateral warranties are the heavier route, giving the beneficiary a direct contractual claim, and they take negotiation.
The timing point is the one that costs money. A consultant asked for reliance at appointment will usually agree it for nothing. The same consultant asked two years after final invoice, when the firm has changed insurer, may decline or charge. Build the list into the appointment schedule.
Collateral warranties and assignment
Assignment clauses typically permit one or two assignments of the appointment without consent. Count how many you might need across the life of a site: special purpose vehicle to parent, parent to purchaser, purchaser to funder. Two is often not enough.
Where a collateral warranty is required, agree the form at appointment and append it to the contract. A warranty negotiated later becomes a commercial hostage, and on a site with eight consultants it becomes eight negotiations at the worst point in the programme.
As an illustrative example, a developer appointing an ecologist, an arboriculturist, a transport consultant and an acoustician on a 30 unit scheme should settle four things in each appointment: limit of indemnity, run-off period, cap basis, and a named reliance list including the funder. Four lines each. Doing it later costs multiples of the original fees.
What to ask for in writing
Send the same six requests to every consultant before instructing.
- A current certificate of insurance naming the contracting entity, with limit, basis and policy period.
- Confirmation of any retroactive date and of continuity of cover.
- Confirmation of the run-off period that will be maintained after the firm ceases trading.
- The proposed liability cap, expressed as a sum rather than a formula.
- Any exclusions relevant to this commission, stated explicitly.
- Agreement to reliance by a named list of third parties.
Check that the insured entity on the certificate matches the entity you are contracting with. Trading names, group companies and individual practitioners get confused, and a certificate in the name of a dormant parent is worth nothing.
The same discipline applies whether you are commissioning a single survey or a full evidence base, and it pairs with the competence question rather than replacing it. Deciding who should prepare a Transport Assessment is a competence judgement. Deciding whether their insurance answers if they get it wrong is a separate one.
Where a draft needs a named professional to review and sign it off, PlanScope's professional directory is the route for that review, and the same insurance questions apply to the reviewer. You can see which of the 66 report types are labelled as needing a qualified or competent author before you start appointing.
Enter your postcode on PlanScope to see which reports your site is likely to need, then appoint against that list rather than against a generic schedule.
This is general guidance, not legal advice. Check the position with your local planning authority or a qualified professional before relying on it. For specialist technical reports, qualified professional input may be required. PlanScope provides AI-assisted draft reports for planning applications. Reports should be reviewed before submission. We do not guarantee planning approval.
Frequently asked questions
What does claims made mean?
The policy that responds is the one in force when the claim is notified, not the one in force when the work was done. So a report written five years ago is only covered if the author still holds a policy today with no relevant exclusion and unbroken cover in between. That single feature drives almost every other question worth asking.
How much cover should a consultant carry?
Enough to meet the loss their work could cause, which is rarely related to their fee. A survey costing £3,000 can sit behind a design decision worth several hundred thousand pounds. Judge the level against the consequence of the report being wrong, and check whether the limit is each and every claim or a single annual aggregate.
What is run-off cover and why does it matter?
Run-off cover is insurance a firm maintains after it stops trading, so claims notified later still have a policy to respond to. Without it, a retiring sole practitioner or a dissolved company leaves you with nothing to claim against. Ask how long run-off will be maintained and get the answer in the appointment rather than in conversation.
Is a net contribution clause acceptable?
It is common and usually negotiable at the margins. It limits the consultant's liability to the share a court would attribute to them assuming every other party paid their part, which shifts the risk of another party's insolvency onto you. Accept it knowingly, and make sure the rest of the team is on comparable terms so no gap opens between them.
Do I need a reliance letter if I am the client?
Not for yourself, because your appointment gives you a contract. You need reliance or a collateral warranty for anyone else who will depend on the report, including a funder, a purchaser or a joint venture partner. Sort it at appointment, because a consultant asked for reliance two years later can decline or charge for it.
Sources and further reading
This article is general guidance about the planning system in England and, where stated, the rest of the UK. It is not legal or professional advice. Check your local planning authority’s validation requirements and take professional advice for your specific site.