Professional indemnity insurance to require from a consultant
The policy that responds is the one in force when the claim is notified, not when the report was written. Here is what to specify and what to read on the certificate.
Specify professional indemnity insurance by four things: the limit, whether it applies to each and every claim or in the aggregate, the period of run off after the appointment ends, and the exclusions that bite on the service you are buying. Professional indemnity insurance for a planning consultant is written on a claims made basis, which means the policy that responds is the one in force when the claim is notified, not the one in force when the report was written.
That single feature drives everything else, and it is the reason a consultant who retires two years after writing your flood risk assessment can leave you with nobody to claim against.
Why the level matters on a planning report
The value at risk is rarely related to the fee. A transport statement costing a few thousand pounds can support a scheme worth several million, and an error that causes a refusal, a redesign or an abortive land purchase produces a loss on the scale of the scheme.
Set the limit against the consequence of the advice being wrong, then sense check it against what firms of that size normally carry. A sole practitioner ecologist will not hold the cover a multidisciplinary engineering practice does, and demanding it will either lose you the consultant or produce a policy bought for one job and dropped afterwards.
Professional bodies set minimum requirements for regulated firms. Chartered surveying practices and chartered architectural practices both have to hold cover on minimum terms set by their institution, with levels usually scaled to turnover. Check membership status as well as the certificate.
Claims made policies and what that means
Under a claims made policy the insurer responds to claims notified during the policy year, regardless of when the work was done. Continuous cover therefore matters more than the limit in the year of the appointment.
Three practical consequences. A consultant who lets cover lapse has no insurance for past work, even work done while insured. A consultant who changes insurer must disclose known circumstances, and an undisclosed issue can leave a gap between policies. And a claim notified after the policy period ends is not covered unless run off is in place.
Ask for confirmation of continuous cover since the firm started trading, alongside the current certificate.
One more wrinkle. Where a practice is acquired or restructured, the new entity's policy may exclude the predecessor's work unless prior acts cover was bought. On a long running scheme, ask what happened to the insurance each time the letterhead changed.
Run off cover after an appointment ends
Run off is cover maintained after a firm stops trading or ends a line of work, and it is the protection that matters most on planning reports, because defects surface years later.
Match the period to your limitation exposure. Claims founded on a contract under hand are generally time barred six years after the breach, and twelve years where the appointment is executed as a deed. Latent damage rules can extend that in negligence claims. So a six year run off requirement on an appointment executed as a deed leaves a six year gap where you have a claim and the consultant has no insurer.
Write the requirement into the appointment: cover to be maintained for a stated number of years from completion of the services, with evidence provided annually on request. Without the evidence clause you will not find out about a lapse until you need to claim.
Aggregate against each and every claim
An each and every claim limit applies afresh to every claim. An aggregate limit is the most the insurer will pay across the whole policy year, however many claims arise.
On a small firm with an aggregate policy, a single large claim from another client can exhaust the cover before yours is notified. That is not hypothetical: aggregate policies are common at the smaller end of the market precisely because they cost less.
Where an aggregate limit is all that is available, consider requiring a higher figure, or a project specific policy for the appointment. Project specific cover is expensive and slow to arrange, so reserve it for the appointments where the exposure justifies it, such as a viability assessment supporting a large section 106 negotiation or a contamination report on a residential scheme.
Exclusions that matter in practice
Read the exclusions, because they have moved considerably in recent years.
Fire safety and cladding exclusions became widespread across construction professional indemnity after 2019, and they can extend well beyond external wall systems on tall buildings. If your consultant is producing fire related advice, check whether the policy actually covers it, because a fire statement requires a professional with the necessary fire engineering competence and the insurance to match.
Other exclusions to look for: asbestos, pollution and contamination, which matters on land quality work; cyber, which matters where data handling is part of the service; and exclusions for work outside the United Kingdom. Some policies also carve out design and build appointments or novation.
Net contribution clauses sit alongside the insurance. They limit the consultant's liability to their fair share where several parties contributed to a loss, and they are standard in institutional appointment forms. Whether to accept one is a commercial judgment rather than an insurance question.
Contamination work is the sharpest example. A land quality consultant whose policy excludes pollution has insurance that will not respond to the one thing the report was about, and the exclusion is easy to miss because the certificate rarely lists it. Ask the broker directly.
Checking the certificate
Ask for the broker's certificate, not a screenshot. What to read on it:
- The insured entity name, matched against the company you are contracting with.
- The policy period, and whether it is current at the date of appointment.
- The limit of indemnity and whether it is each and every claim or aggregate.
- Confirmation that it is a claims made professional indemnity policy.
- Whether the business description covers the service you are buying.
Point five catches people out. A policy describing the business as architectural services may not respond to a principal designer role or an ecological appraisal carried out by the same practice.
Setting a proportionate requirement
Tier the requirement by risk rather than applying one figure across the whole team. Specialist reports where an error leads to redesign or remediation justify higher cover than a document that simply narrates policy.
Our notes on what competent person means in planning legislation and on viability assessment competence under RICS standards cover the qualification side of the same appointment decision. Insurance and competence are separate questions, and a consultant who is strong on one can be weak on the other.
PlanScope's professional directory is the route to a reviewer who can check and sign off an AI-assisted draft. Ask the same insurance questions of a reviewer as of an author, because signing off a document creates its own liability.
This is general guidance, not legal advice, and insurance terms differ between policies. Check the position with your broker, your solicitor or a qualified professional before relying on it. 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 cover mean?
The insurer responds to claims notified during the policy year, whenever the work was done. Continuous cover therefore matters more than the limit in the year of the appointment. A consultant who lets cover lapse has no insurance for past work, even work carried out while they were insured.
How long should run off cover last?
Match it to your limitation exposure. Contract claims are generally time barred after six years, or twelve where the appointment is executed as a deed, and latent damage rules can extend negligence claims further. Requiring six years on a deed leaves a gap, so specify the period in the appointment and ask for annual evidence.
Is an aggregate limit acceptable?
It can be, though it is weaker. An aggregate limit is the most the insurer pays across the whole year, so another client's claim can exhaust it before yours is notified. Where only aggregate cover is available, consider a higher figure or, on high exposure appointments, project specific cover.
Which exclusions should I check for?
Fire safety and cladding exclusions are now widespread and can extend beyond tall buildings. Asbestos, pollution and contamination exclusions matter on land quality work. Also check the business description on the certificate covers the service you are buying, because a policy written for architectural services may not respond to an ecological appraisal.
Should reviewers hold the same cover as authors?
Yes, ask the same questions. Reviewing and signing off a report creates liability for the reviewer, and a sign off carries weight with the local planning authority precisely because a named professional stands behind it. Check the policy covers review and certification work rather than only original authorship.
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.