Presentation - The Warren Centre for Advanced

PPIR: Addressing Liability & Insurance
in Engineering Practice
Allison Grice
National Manager, Long Tail Claims
CGU Insurance
CGU is a leading professional indemnity insurer of a
broad range of professional service providers, including
engineers in a wide variety of engineering disciplines.
Why is CGU Insurance Involved in PPIR?
It is critically important to CGU, other professional indemnity insurers and
those who deal with the professional conduct of engineers, that industry
guidelines and standards which benchmark the professional performance,
and assessment of performance, of engineers, are spelt out and adopted
in the legal and insurance sectors in which the liability of engineers is
contracted, and determined when disputes arise.
Why is CGU Insurance Involved in PPIR?
Certainty around the way engineers provide their services and how their
liability is assessed and insured benefits:
 Engineers.
 The recipients of engineers’ professional services.
 Those in the wider context who are impacted by the professional
services provided by engineers, including insurers.
The front end of professional practice:
Clearly defining the roles and responsibilities of engineers in their commercial
relationships to minimise the scope for contractual disputes; and
The dispute resolution end of professional practice:
Having a defined framework clearly setting out the key aspects of
engineering performance against which the duty and standard of care of
the professional engineer can be assessed by all of the different interests
involved in that process.
Key Liability and Insurance Challenges
• Establishing benchmark standards for the professional performance,
and assessment of performance, of engineers (which PPIR does).
• Having a professional performance guidance framework for engineers
accepted by the engineering, legal and insurance sectors to clarify,
simplify and standardise engineering performance in practice.
• Establishing a system for the accreditation of engineers as expert
witnesses and the acceptance of accredited experts in the legal and
dispute resolution spaces.
Benefits of PPIR
• Considerations which contracts for the provision of engineering services should
cover but often don’t.
• “A good contract is good insurance.”
• A clear, concise framework of guidelines which embody good engineering practice
against which engineers’ professional performance can be measured and assessed by:
• Engineers.
• The legal profession in dealing with disputes about engineering performance.
• By insurers who underwrite engineers’ professional performance.
• The underlying commercial contract often doesn’t cover key aspects of the
engineering task – “it’s not all there.”
• There is uncertainty or misunderstanding about the scope of the engineering services
the parties intended to be provided.
• Every party with an interest in pointing the finger of blame at the engineer can find an
engineering “expert” to support their position.
• The lawyers and courts charged with determining the dispute have a range of
supposedly “expert” engineers each offering a different “expert opinion.”
With PPIR …
Managing the exposure of engineers to legal liability arising from the
provision of their professional services is a central focus of:
• The profession.
• The recipients of engineering services.
• The legal system; and
• The professional indemnity insurers of engineers.
Engineers would benefit enormously from better definition of benchmark
engineering practice, which the PPIR Protocol delivers.
National Adoption of PPIR
- would give
guidance about the nature and extent of their duties
certainty about standards of practice against which professional conduct will be assessed.
Legal system
performance framework for assessment of liability and resolution of disputes
by reference to the opinions of accredited expert engineers and the Protocol.
Insurance industry
greater comfort about management of risk and assessment of liability
making engineering risks more attractive to insurers; reducing cost of PI insurance
How will PPIR affect PI Insurance for Engineers?
• The loss experience for engineering professions should drastically improve
making them much better and more attractive risks for insurers.
• Insurers will be able to better manage risk by insuring engineering
practices which comply with the PPIR Protocol guidelines.
• The resolution of legal disputes involving engineers will be much more
certain and consistent by reference to the PPIR Protocol guidelines and the
truly expert opinions of engineers accredited as experts against them.
Role & Objectives of the PPIR Liability Project Team
To build a team of key representatives of the engineering, insurance,
legal and judicial industries who will be most influential in bringing
about national adoption and implementation of the PPIR Protocol.

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