ABSTRACT
For all professionals engaged in the construction industry the obtaining of professional indemnity insurance is essential. Many of their professional bodies - for example the Architects' Registration Board - insist that they carry such insurance. Similarly, for most employers or contractors contemplating engaging the services of professionals engaged in construction related work, the availability of professional indemnity insurance is a paramount consideration. Often employers or contractors will insist upon the professional disclosing details of his professional indemnity cover and sometimes it is a requirement that specific cover is obtained for the project. If a dispute arises between an employer or contractor and the professional engaged by him the professional's defence will usually be conducted by solicitors appointed by his indemnity insurers, decisions as to whether to contest and at what level to settle the dispute will be taken by those insurers and the limit on recovery in the claim may well depend upon the limit of insurance carried by the professional under his indemnity policy. Consequently it is essential for both professionals and those employing them to be aware of the way in which indemnity policies work and the practical consequences which they entail for disputes involving construction professionals.
