A contract that asks for PI usually wants three things: a limit, how long you keep cover, and a certificate proving it. One standard policy usually meets all three.
This is general information from the PI Insurance site, not advice about your contract. A broker checks your clause. It is not legal advice on the contract.
Read the clause for five things
- The limit. For example "not less than $2,000,000".
- Per claim or aggregate. "Each and every claim" and "in the aggregate" mean different things. Some government panels ask for more in the aggregate than per claim.
- How long. Many clauses ask you to keep cover for some years after the contract ends. That is run-off.
- Proof. A certificate of currency before you start, and sometimes each year. It is one page, from the insurer or broker, showing the policy is in force, its limit and its dates.
- Who is insured. Some clauses ask for the client to be noted on your policy. PI policies rarely allow that. A broker can explain your cover to the client in writing instead.
Clauses to take to a broker before you sign
These are common and often fixable, sometimes with a short email to the client.
- A run-off period that is unusually long.
- A limit above $10m.
- Fitness for purpose: a promise that the work will achieve a result. The law expects reasonable care, not a guarantee, so PI often does not cover this.
- An indemnity beyond the law: words like "indemnify", "hold harmless" or "release", covering losses you did not cause or with no cap. PI may not cover the part beyond your legal liability.
- Liquidated damages: a fixed sum you owe, often a daily rate for finishing late. Often not covered by PI.
- Consequential loss accepted without a limit: lost profits, lost revenue, delay costs.
- Proportionate liability removed: you could end up liable for other people's share of the blame.
- Novated design: your design contract moves from the owner to the builder. Tell your broker before it happens, and have the deed checked.
Keep a record
- List every contract that has a run-off clause.
- Keep each certificate of currency.
- Ask subcontractors for their own certificate.
An idea, not an offer: clause review
The PI Insurance team has discussed a clause review. The preview site has a "Send us your clause" link. A reviewed service, signed off by the broker, is not offered.
If it is built:
- You would send the insurance clause from your contract.
- AI would draft a first read: the cover types, limits, run-off, indemnities and liability caps the clause asks for.
- The draft would also list what it looked for and did not find, so nothing looks finished when it isn't.
- Alex would check the draft and reply.
- One version would start in your own AI: a prompt would pull out only the insurance terms, with names, rates and parties removed. Only those requirements would be kept, never the contract text.
- It would stay about insurance, not legal advice on the contract.
- Saying "this policy meets your contract" is likely personal advice, so the licensee would need to approve the service first.