With the whole of South Africa looking like a building site these are exciting times for the construction industry.

Yet, says Marnelle Ward, Professional Indemnity Specialist for Alexander Forbes Risk Services “it is surprising how much can go wrong in the planning and execution of projects – despite the best efforts of highly skilled engineers, architects, quantity surveyors, town planners and other professionals.”

For example: Misalignment of a road, encroachment on a building line, incorrect construction specs leading to cracking of walls, incorrect or insufficient geotechnical information leading to foundation problems, incorrect specs on columns leading to support problems, wheel chair ramps built at the same angle as stair cases, far too steep for wheel chair access, spiral stair cases too small or steep for furniture to be carried to the second floor.
“Many professionals scoff at these ‘silly’ mistakes but it is amazing how easily even an incorrectly placed decimal point can lead to a large claim” says Ward.

And this is not because people in the industry lack skills or are incompetent. Any project combining several planning processes, construction systems and skills sets – like project managers, engineers and quantity surveyors - often operating in difficult geographic conditions against tight deadlines is fraught with the potential for poor coordination or error.

And when mistakes are made, money is lost – and someone has to pay. This is where Professional Indemnity (PI) comes in: “PI covers professionals being sued by their clients for negligence, error or omission in the course of their professional duties,” explains Ward.

Knowing that PI covers the firm, and everyone employed by the firm, provided they are qualified to do the job they are performing, is essential in today’s high pressure, high volume building environment. Having PI means that when things do go wrong, assessors are quickly appointed by the insurer to investigate the matter. And, says Ward, “since PI responds to even alleged incidences of error the costs of establishing responsibility and quantifying loss are also covered.”

This is important as in even relatively small projects establishing the costs of culpability can destroy a company outright or involve its professionals in crippling, and extended, culpability disputes – even before culpability is established.”

Ward adds that “while a professionals’ PI does not cover any of his or her sub-contractors it does cover the professional for any work carried out by the sub-contractor.” Hence it is equally important that all sub-contractors (established, new and emerging) secure PI for themselves since they are not covered under the principal professionals PI and could be wiped out in the event of something going wrong. As such most businesses in the construction sector now insist that their professional teams as well as their subcontractors take out PI as a precondition of appointment.

Ward recommends that “in a high pressure building environment where one mistake can destroy a practice, it is highly recommended that all professionals involved in a project purchase PI 

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