Most practices in the UK have less than 10 employees. They are creative and highly motivated. However. the work they can bid for is inhibited by practice-based professional indemnity insurance (Pll) limits.
Pll is restrictive and needs to be changed. It is the cause of under utilisation of a valuable national resource. It leads to wasteful and inflexible working practices and adversarial contract practices. It constrains collaborative working, which is essential if we wish to provide better value for our clients and for society as a whole. Above all. it leads to unnecessary and excessive legal costs.
If the UK construction industry were to move from practice-based Pll to project based insurance a number of benefits would accrue. Small practices would be able to network much more easily and be appointed for larger projects. Work could, as a matter of course. be dealt with collaboratively between architects. other consultants, specialist contractors and main contractors and problems would be addressed more easily as they arose. instead of being the cause of the different parties taking cover behind their insurers to minimise their liability.
By bringing small practices back into the public building marketplace a significant national resource would be released to work on an unprecedented volume of public works building contracts. Instead of being under pressure to form larger companies. and thereby negating their very strengths. small practices would once again be able to contribute to the public sector building programme and demonstrate their great strengths of creativity and ingenuity.
One significant benefit of such a change would be the opportunity, provided by small local practices, to reconnect the public building programme with local communities. It is time for the profession and government to recognise the costly constraints and outmoded risk management model that PI! represents and to devise an alternative project-based insurance system. which would result in a genuinely collaborative working culture in the UK construction industry.
Hans Haenlein www.haenlein.com