What Is Professional Indemnity (PI) Insurance?

Professional indemnity insurance protects your business if a client claims that your design, specification, advice, or sign-off caused them financial loss or delay.

It covers:

• Legal defence costs

• Compensation payouts

• Allegations of negligence

• Breach of contract

• Errors or omissions in design work

It applies even when the design work was done by a third party under your name or contract.

Subcontracted Design — Where Liability Still Falls on You

Fire contractors often outsource system design, especially for:

• Sprinklers and mist systems

• Gas suppression layouts

• Fire alarm zoning or coverage

• Integration with other life safety systems

But if:

• The client contracts you, not the designer

• Your company name appears on the drawings

• You submit or approve the design

• You commission or sign off the system

• You package design and install as a combined service

Then you can be held liable — regardless of who actually created the design.

Example Scenarios

Example 1 – Fire Alarm Layout Error
You subcontract alarm system design for a commercial fit-out. After installation, the client discovers that coverage doesn’t meet BS 5839. They hold you responsible for the rework costs and project delays.

Example 2 – Suppression System Miscalculation
Your subcontractor provides suppression nozzle spacing, but they’ve missed a critical coverage zone. The client sues for non-compliance, and the claim comes to you as the primary contractor.

Example 3 – Sign-Off Responsibility
Even though a third-party designed the system, you commissioned it and issued the certificate. A failure later leads to loss and you’re named in the legal claim.

Is PI Insurance a Legal Requirement?

No — it’s not legally required like employers’ liability.

But it’s often:

• Contractually required by main contractors, public sector clients, or housing associations

• Expected in design & build contracts

• Essential to protect your business when working on high-value projects or systems with safety-critical implications

When Fire Contractors Definitely Need PI Cover

• If you issue certificates for installed systems

• If you subcontract design but offer it as part of your service

• If you review, amend, or approve technical drawings

• If you coordinate fire protection system design with other trades

• If you’re involved in public sector, commercial, or regulated projects

In short: if you touch the design in any way — directly or indirectly — you should be insured.

What Happens If You’re Not Covered?

Without PI cover, you risk:

• Paying legal defence costs out of pocket

• Personally funding settlements or compensation

• Breaching contract conditions

• Losing future work with main contractors or frameworks

• Reputational damage if a claim goes public

Even if the design wasn’t yours, you can still be dragged into legal action.

How Much PI Insurance Do You Need?

Typical levels for fire contractors:

• £250,000 – for small-scale, domestic or low-risk projects

• £500,000 – £1 million – standard for most commercial work

• £2 million+ – for large public contracts or framework tenders

Higher cover may be required in contracts — always check the spec before quoting.

What Else Should Be Included?

You may want a combined policy with:

• Public liability

• Tools and plant cover

• Contractors all risk (CAR)

• Employers’ liability (if applicable)

This keeps costs down and ensures no gaps in protection.

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/