In 2022, as in 2021, one of the most common queries we’ve had is requests to review reports and certificates relating to performance solutions.

These reports are becoming increasingly common because of two factors:

1. the commencement in July 2021 of the new Part A2.2(4) in the National Construction Code which demands proper documentation of performance solutions (but does not stipulate who is responsible for this documentation); and
2. building surveyors/certifiers who have faced serious difficulties in obtaining professional indemnity insurance due to poor claims experience, seeking to defray the risk of liability claims.

The contract review service that we provide for professional indemnity insurance clients of Planned Cover covers certain kinds of insurance risks in consultancy agreements and related contracts like novation deeds, deeds of release and general quality certificates. However, our Risk Managers can’t review reports or certificates relating to performance solutions as they call for technical knowledge of NCC provisions rather than insurance advice.

Many of these reports will cross over several disciplines, including generalists like building surveyors/certifiers and architects, and specialists like fire, façade or structural engineers. So each report may require sign-off from several consultants.

Ultimately, each individual consultant will have to make a judgment call on whether they can prepare or sign off on these reports. Our previous article on this topic in 2021 (read the full article here) outlined some key factors to consider, including:

1. Is the subject matter of the certificate within the expertise of a member of the profession(s) noted on my professional indemnity insurance? (Claims arising out of advice given in other professions would be uninsured)
2. Are all the statements and the conclusions in the certificate correct? (Conduct which is knowingly dishonest, rather than merely negligent, is commonly excluded from professional indemnity insurance cover)
3. Does the certificate contain any “assumed liability” language that should be deleted or amended? (Professional indemnity insurance commonly excludes cover for elevated contractual liabilities that exceed a consultant’s common law liability)
4. If my assessment of the certificate is reliant on information or specialist technical expertise provided by others (e.g. certification provided by product manufacture, or advice of fire engineer for specific fire compliance matters), does the certificate say so?

Also bear in mind that professional indemnity policies may exclude cover for certain products or materials (asbestos is a common exclusion, as is non-compliant aluminium composite panels with a polyethylene core). Different policies exclude different materials, and consultants should keep their team aware of which specific products their own policy excludes. Any reports or certificates which involve these excluded products should be avoided, or managed with extreme care, as claims arising out of them are likely to be wholly uninsured. If there is any doubt that over whether the solution is NCC-compliant, the solution needs to be rejected and the report or certificate cannot be signed at all.

In the long term, these reports and certificates should provide better quality control around performance solutions and reduce the risk of large claims arising out of non-compliant buildings. For now, the challenge is developing knowledge and systems to support the new documentation requirement. Our Practice Guide Inspections and Certificates, available to Planned Cover professional indemnity insurance covers, provides some general drafting tips for improving the wording of certificates.

Wendy Poulton
Manager Risk Services

This article is only general advice in respect of risk management. It is not tailored to your individual needs or those of your business, nor is it intended to be relied upon as legal or insurance advice. For such assistance you should approach your legal and/or insurance advisors.