The Department of Public Expenditure and Reform has published revised guidelines for professional indemnity insurance (PII) for public works projects procured under the Capital Works Management Framework (CWMF).

As a result of a tightening insurance market for PII, it is becoming difficult to obtain PII at levels that were previously commonplace. Policies for construction professionals and contractors are becoming increasingly expensive, are providing a reduced level of cover, have a greater number of exclusions and increased levels of excess.

The Office of Government Procurement (OGP) has engaged with industry and insurers operating in the professional indemnity insurance (PII) market on this issue.

The revised guidelines have been introduced in recognition of the significant changes in the cost and availability of PII over the past two years.

The new guidelines are designed to reflect the level of insurance currently available, thereby ensuring that contractors and consultants can continue to participate in competitions for public works projects whilst maintaining levels of insurance that are proportionate to those projects.

Commenting on the new guidelines, the Minister for Public Expenditure and Reform, Michael McGrath, said: “I recognise the problems that a tightened insurance market for PII is having on public works projects at present. I have been working with my officials considering how best to balance the requirement for adequate risk provision and the availability of appropriate PII in a challenging market.

“The revised requirements reflect the current level of PII that is available and will ensure that otherwise capable and competent consultants and contractors are not excluded from public tenders because levels of PII are being set that are not generally available in the market.”

The guidance and revised procurement documents associated with the procurement of works-related consultancy services can be found at www.constructionprocurement.gov.ie