Professional Indemnity Insurance Part 2

This is the second in a two-part series on Professional Indemnity Insurance (PII). This post will provide more details and provide some case studies. The Main Exclusions of Professional Indemnity Insurance fraudulent or international acts contractual liabilities express warranties and guarantees time and cost overrun non-compliance with building regulations costs of redesigning plans, specifications, or schedules construction damage if designers are within the same legal entity as the Contractor cross-liability, if not otherwise agreed fines and penalties loss of profit, lack of performance (entrepreneurial risk) asbestos gradual pollution The Premium Basis of Premium Calculations The Premium rate depends on: type of covered activity nature of the project type of service(s) experience of the Architect/Engineer total fee income contract value territory claim experience limit of indemnity insurance duration, retroactive period and extended reporting period Case Study 1 An…

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Professional Indemnity Insurance Part 1

An Overview of Professional Indemnity Insurance Professional Indemnity Insurance (PII) policies protect against legal liability and pay damages arising out of negligence and performance of professional duties. Professionals such as doctors, legal professionals, Chartered Accountants, Architects and Engineers (A/E), etc. are covered by PII. Risks are classified into three broad groups. For doctors, professional negligence may result in bodily injuries. Whereas, for auditors and accounts, professional negligence may result in financial losses. As far as architects and engineers are concerned, the risks associated with professional negligence may result in material damage and/or bodily injury. So, the basis of liability is negligence. For professionals, there exists a duty of care. Negligence is the breach of that duty and the loss or damage caused by that breach. In terms of the professional indemnity for architects and engineers, during the design phase, exposure arises due to error,…

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The Typical Sequence of Activities and Events in FIDIC’s Gold Book Part 2

This is the final post in a four-part series on The Typical Sequence of Activities and Events under FIDIC. Parts one and two covered the FIDIC Red, Yellow and Silver 2017 editions, and part three began the FIDIC Gold 2008 edition with the lifecycle and payments. This post continues the sequence of activities and events in the Gold book and will be covering the determination, claims, and the settlement of disputes. Determinations by the Employer’s Representative Determination as per Sub-Clause 3.5 (Determinations by the Employer’s Representative) is quite straightforward. First, the Employer’s representative consults each party to reach an agreement. If there is no agreement, then a fair determination in accordance with the contract, taking due regard to all circumstances, is made. This is binding unless it is taken up under Clause 20 (Claims Disputes and Arbitration). Contractor’s Claims - Submissions As soon as (or within 28 days after) the Contractor becomes aware of a claim, the…

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The Typical Sequence of Activities and Events in FIDIC’s Gold Book Part 1

This post is the third of a four-part series on The Typical Sequence of Activities and Events under FIDIC. Parts one and two dealt with the project lifecycle based on FIDIC Red, Yellow, and Silver 2017 editions. In this post and the next, our attention will turn to the FIDIC Gold Book 2008. Let’s begin with the overall contract period of the Gold Book First Edition 2008. The DBO Contract Period includes the Design & Built plus the Operation Period. This means from [Commencement Date] Sub-Clause 8.1, it stretches to DB Period till Sub-Clause 11.7, [Commissioning Certificate]. This Sub-Clause is like the taking-over certificate in the Red, Yellow, and Silver Books. In the Gold Book, it's the commissioning certificate. The contract completion certificate (Sub-Clause 8.6) is issued after the completion of the operations period. The Gold Book has a tender period with a certain base date (Sub-Clause 1.1.5), followed by the tender submission, and then the issue of the Letter of…

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The Typical Sequence of Activities and Events in FIDIC’s Red, Yellow and Silver Books Part 2

This is the second in a four-part series named Typical Sequence of Activities and Events. Part one dealt with the project lifecycle based on FIDIC Red, Yellow, and Silver 2017 editions. In this second part, we will move to the sequence of payments as indicated in Clause 14. The Engineer shall issue an Advance Payment Certificate (APC) for the advanced payment within 14 days after either a) the Engineer has received both the Performance Security and the Advance Payment Guarantee, b) receiving the Contractor's application for the advanced payment under Sub-clause 14.2.1. After receiving the Advance Payment Certificate, the Employer should make an advanced payment for mobilization. The advance payment shall be replayed through percentage deductions in the payment certificates. If the percentage is not stated, then a deduction shall apply in the interim payment certificate in which the total of all certified interim payments exceed 10% of the Accepted Contract Amount and deductions shall…

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