Principal Designer under the Building Safety Act and Professional Indemnity Insurance Coverage

As a general overview, the new regulatory regime for the Building Safety Act 2022 (BSA) came into force in England on 1st October 2023.

The new role:

From 1st October 2023 as per the Building Regulations etc. (Amendment) (England) Regulations 2023, all applicable projects (where there is more than one contractor or it is reasonably foreseeable that more than one contractor will work on the project) must have a Principal Designer with control over the design/building regulations element of the project. This role may be undertaken by an individual, or a firm.

It is important to note that this is a distinct and separate role from the Principal Designer role under the Construction Design & Management Regulations 2015 (CDM), which many firms will already be familiar with. Whilst separate, the same firm may undertake both roles where they have the requisite competencies and capabilities to do so. More detail on the required skill and competency for the role is set out in the Act itself, which provides detailed information on the competencies, duties and notices required. Further to this, firms should also refer to the British Standard Publicly Available Specification (PAS) 8671.

Whilst the prior Principal Designer role under CDM was primarily focused on health and safety, the duties introduced under the BSA role will be to co-ordinate design work so that all reasonable steps are taken to ensure that the design (if it were to be built) would be in accordance with the relevant requirements, such as Building Regulations.

Risk and potential pitfalls:

The overriding aim of the act is to reduce safety risks on projects (such as fire or structural risks) through greater regulation, scrutiny, shared responsibility and duties of those engaged on projects which in theory, should provide insurers a degree of comfort. However, there will undoubtedly be a number of new (or enhanced) risks to firms during the lifecycle of a project.  

Failure to comply with the new duties could have a number of consequences for both firms and the project, such as:

1. Rejection of the application for building control (creating additional costs or delaying projects) or the inability to obtain a final completion certificate from the building control body engaged. These additional costs may end up forming part of a civil claim.

2. One point of concern is that there is also the potential for individual duty holders to face fines (which are potentially unlimited) and/or criminal prosecution (please note the comments below on insurance cover for criminal prosecutions) from the Building Safety Regulator. These are not mutually exclusive, a civil claim may exist alongside a parallel criminal prosecution.

Cover under Professional Indemnity Insurance:

A key question raised by many firms is whether these new duties and more generally the role of Principal Designer under the BSA is covered under their PII. Policies presently do not contain any exclusions or restrictions around the performance of this role and we would not expect exclusions to be imposed in the future, given it is a statutory role.

Insurers will no doubt be keeping a keen eye on their exposures to this area and, to a degree, the onus will fall on firms to be able to demonstrate to Insurers that they have the requisite competency to undertake this role and that the risks are being effectively managed. Firms intending to undertake this role should ideally be considering:

1. Whether they fully understand the legislation and its impact on the firm;
2. Whether the processes and procedures currently in place are adequate to correctly perform (and monitor performance) of the new role;
3. Whether there are gaps in competency within the practice and if so, how these can be remedied;
4. Whether they have allocated adequate time and resources to perform the role; and
5. That they are conveying this new role, including its responsibilities and obligations, to the client.

One important point for firms intending to undertake this role will be how the role is reflected within the appointment contract. As a risk management point, firms should seek to ensure that the responsibilities they are agreeing to contractually do not exceed the role as it is contained in statute, either in breadth of duties or the standard to which firms are to be held to. This point is particularly pertinent when considering bespoke client contracts.

Presently, it appears to be the case that the role has not yet been fully incorporated into the main body of the contract in the way that the CDM equivalent is. However, it should be noted that many industry standard forms are in the process of being updated, which will no doubt include provisions to deal with the new role.

Specific Cover (Criminal Prosecution):

One additional point that firms (and the individuals undertaking the role) should be considering is the potential for criminal prosecutions. It is not uncommon for the PII policy to contain an extension to cover for the defence of criminal proceedings (subject to conditions), where for example, a prosecution is brought for breach of CDM Regulations 2015. The breadth of cover available under such clauses does vary from policy to policy and with the introduction of the new duties/role under the BSA, firms should consider whether their current policy extends to provide cover for proceedings under the new regime (rather than being specific to just CDM, for example).

If you have any specific concerns or queries regarding your insurance coverage with this introduction of the new Principal Designer role, please do not hesitate to contact us.