A construction industry association is lobbying the government to change liability laws in order to reduce the spiralling costs of professional indemnity (PI) insurance for the industry.
The Association of Consulting Engineers (ACE) said it was calling on the government to introduce a Bill to change the law on joint and several liability in the construction industry.
ACE chairman David Upton and chief executive Nelson Ogunshakin met construction minister Nigel Griffiths MP earlier this month to discuss the issue of PI premiums.
The organisation claims PI premiums have risen by up to 300% for engineering consultancy firms.
“The current situation is unsustainable,” said Ogunshakin. “UK engineering consultancy firms are facing intolerable business pressures, brought on by PI insurance premiums that in some cases are equivalent to up to 6% of their annual turnover.
“They also face rocketing claims excesses and an increasing number of limitations to their cover, including work in relation to asbestos and terrorist exclusions.
“Many of our member companies are finding it increasingly difficult to operate within a legal framework in which they are regarded as the financial guarantor for other parties to a contract when claims arise.
“The current system of joint and several liability discriminates against firms, irrespective of blame, making them responsible for the failings of other parties over which they have no control.”
The association, which represents over 750 UK engineering consultancy companies, said it was pressing the government to change the joint and several liability rules for the construction industry, including full consideration of a rational and fair statutory capping regime to alleviate the problems of disproportionate liability.
It is also calling for measures to address the problem of terrorism exclusions in PI cover, and the difficulty in obtaining cover for asbestos-related work.
