Do Builders Need Professional Indemnity Insurance?
Not all builders need professional indemnity insurance — but if you offer design input, give advice, or take on design & build contracts, it could be essential. Here’s what it covers and how to know if you need it.
What Is Professional Indemnity Insurance?
Professional indemnity (PI) insurance protects your business if a client claims that your advice, design, or professional service caused them financial loss. It covers legal defence, compensation, and costs, even if the claim is unfounded.
For builders, this means you’re protected if your design input, layout suggestion, or material recommendation causes a problem — even years after the project is complete.
When Do Builders Need Professional Indemnity Insurance?
You should consider PI insurance if you:
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Provide or amend drawings or designs
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Offer structural or layout advice
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Work on design & build contracts
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Hire subcontracted designers or engineers (but remain liable)
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Act as project lead on larger jobs
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Work on commercial or public sector sites where PI cover is required
If you offer more than just manual labour — you’re likely at risk without PI cover.
Real-World Examples
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Design miscalculation: You recommend a steel beam size for a knock-through, and it later fails a building control check.
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Incorrect drainage layout: Your advice leads to flooding in a client’s basement extension.
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Subcontractor mistake: An outsourced design causes issues, but you’re named in the contract and held responsible.
What Does It Cover?
| Covered by PI Insurance | Example |
|---|---|
| Design mistakes or omissions | Inadequate structural spec for an extension |
| Professional negligence claims | Advice leads to costly damage or failure |
| Contractual disputes over drawings or advice | Client claims your layout caused financial loss |
| Legal defence and compensation payouts | Covers court costs, legal fees, and any awarded damages |
Is It a Legal Requirement?
No, but it’s often a contractual requirement — especially on:
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Commercial projects
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Local authority or government jobs
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Design & build contracts
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High-value domestic works
And even when it’s not required, having PI insurance gives clients confidence and protects your business from costly claims.
Need a quote or want to review your current policy?
Call us on 01474 833 322 or get a fast online quote at: www.abainsurance.co.uk/trades-insurance-quote/
