What do you do when a client asks for your insurance certificate?
The minimum PI cover under the NZIA AAS terms is $250,000; it is not unusual for commercial clients to ask for more. The PI cover you actually have in force – and the terms of that cover – is a confidential matter between you and your insurers: clients have no right to access that information, and you have no obligation to disclose it unless required to do so by the discovery processes as part of court proceedings. Indeed, insurers will be VERY UPSET if you divulge those terms to others!
If the engagement terms require you to prove that you have PI cover at a level of (say) $500,000, then all you need do is to provide a certificate to that effect: there is no need to divulge that you actually have cover of (say) $2,000,000.
When Aon confirmed your cover (typically November/December if you did a yearly rollover) they also provided you with a certificate which shows the “Limit of Indemnity”. If that dollar value corresponds with the engagement terms, you can – if asked for – provide a copy of that certificate to your client. If the engagement terms require cover LESS than that certificate, contact nzacs@aon.com and they will supply a suitable certificate. If the engagement terms require cover MORE than that certificate, contact nzacs@aon.com to discuss a variation to your cover. In the unfortunate event that your entire limit of cover is required to settle a claim, the additional legal costs to get to that point are – under the NZACS policies – also covered.
There are client-specific terms of engagement we have seen that ask for PI cover to “at least the value of the project”. Usually that is not appropriate: what is the chance that you (alone) might be held liable for the entire rebuild of the works? A discussion with your client about a realistic level of cover, along with the additional costs (to their account) of increasing it at their behest may be useful. Alternatively (or in addition) you could make sure they are aware of the lesser cover you carry, and that they accept your engagement on that basis.