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6. Consultant professional indemnity insurance

Infrastructure Planning and Delivery (IPD) branch guidelines for engagement of consultants

Contract phase

Type of activity

Professional indemnity (PI) insurance sum - insured limits

Pre-design

  • Planning brief
  • Master plan
  • Functional brief
  • Feasibility study
  • Minimum $2M any one claim unless project value exceeds $10M.
  • If project value exceeds $10M minimum sum insured to be negotiated with the Department of Health.

Design and documentation

  • Schematic design
  • Design development
  • Contract documentation
  • Allied services not associated with statutory or contractual obligation, e.g. acoustic, ergonomic, interior design, kitchen, landscape, town planning, value management.
  • Minimum $5M any one claim unless project value exceeds $10M.
  • If project value exceeds $10M minimum sum insured limit to be negotiated with the department.
  • Minimum $2M any one claim unless project value exceeds $10M.

Contract administration

  • Tender
  • Construction / contract administration
  • Allied services not associated with statutory or contractual obligation, e.g. acoustic, ergonomic, interior design, kitchen, landscape, town planning, value management.
  • Minimum $5M any one claim for project value up to $10M.
  • Minimum $10M any one claim for project value exceeding $10M but less than $25M. If project value is $25M or more minimum sum insured limit to be negotiated with the department.
  • Minimum $2M any one claim unless project value exceeds $10M.

The PI limits set out above are a guide. The levels can be adjusted in consultation with the Department of Health and Human Services.

If there is a request to address the levels other than the levels set out in the standard brief, the approach should be to:

  1. Consultant to provide a clear proposal of what is recommended.
  2. Support request with an accompanying rationale.
  3. Provide information for consideration.

In support of the request to address the PI levels, the consultant(s) is to set out risk profile and assessment of the services sought in accordance with the project descriptors, specific risks associated with the project such as innovation requirements, site or access constraints, restricted time frames.

The information that would be considered as supportive of establishing specific PI cover levels would include:

  • Type of consultancy and demonstrated experience by staff assigned to the project, the back up arrangements and relevant structure of the firm.
  • Role of consultant in terms of project development (e.g. superintendent of contract) and during which phase does the risk exist, i.e. design, documentation, tender / award, construction, commissioning and builders' defects.
  • Other responsibilities, e.g. project manager also has responsibility for coordination programming, industrial relations, strategic issues project and contract management of scope, cost, quality and cash flow as well as monitoring / reporting to the project control group.
  • Risk assessment (refer to AS 4360) related to the consultancy setting out the magnitude and frequency of risks (in a summary spreadsheet would be useful). Risk exposure should set out the impact overall, e.g. consequences of error such as involves variation negotiations which occur frequently and can have substantial impact on total estimated investment, thus impact is significant.
  • Risk mitigation measures and evidence of use on similar projects successfully completed by consultant (if known) and what is done to contain this risk, e.g. following departmental procedures, IPD supervision, good documentation, checking, QA system, audit and risk reduction measures such as 3rd party independent review and input, training and re-education of staff.