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How the CDM 2015 Regulations could affect your Professional Indemnity Risk

As a construction professional,  the introduction of the Construction (Design and Management) Regulations 2015 (CDM 2015 Regulations),  works to ensure the health, safety and welfare of all construction workers.

Rather than supplement the previous regulations (CDM 2007), the current version supersedes the previous rules and procedures. There have been several key changes to the regulations that you—as the owner or manager of a construction firm, or a construction professional, such as a designer or contractor—will need to learn in order to control your PI risk.

The objective of the CDM 2015 Regulations is to emphasise health and safety through increased coordination between the three primary parties, which are client, designer and contractor. This focus is reflected in the five following key changes

  1. All projects must have the following:
  • Workers who have the correct skills, knowledge, training and experience
  • Contractors who will provide appropriate supervision, instruction and information
  • A written construction phase plan that details the project

2.  A build project—regardless of whether it is non-domestic or domestic—where more  than  one  contractor is involved, must have the following:

  • A principal designer who is responsible for planning, managing, monitoring and coordinating the pre-construction phase of the project
  • A principal contractor who is responsible for planning, managing, monitoring and coordinating the construction phase
  • A health and safety file that outlines how to safely perform routine procedures and clean up the worksite

3.  For any project, the commercial client must always do the following :

  • Provide pre-construction information to designers and contractors, which should outline all known potential hazards that may arise during construction.
  • Make arrangements to ensure those carrying out the project can manage health and safety risks in a proportionate way
  • Ensure that both the principal designer and principal contractor comply with their responsibilities and duties, including preparing a health and safety file and a construction phase plan, respectively.

4. If a project is scheduled to last more than 30 days and will require more than 20 full-time workers, or  will exceed 500 working days, the client must notify the HSE of the project.

5. The CDM coordinator role is abolished and partly replaced by the new principal designer role.

How Does CDM 2015 Affect your P I Insurance ?

While the changes in the CDM 2015 are wide-ranging, the most important one that affects your PI insurance is the abolition of the CDM coordinator role and the establishment of the new principal designer role.

This new principal designer role potentially exposes you to greater professional liability. The HSE defines the principal designer as a designer appointed by the client in projects involving more than one contractor. Principal designers must have sufficient knowledge, experience and ability to carry out the role. Their main duties include the following:

  • Plan, manage, monitor and coordinate health and safety in the pre-construction phase, taking account of relevant information that might affect design work carried out both before and after the construction phase has started.
  • Help and advise the client in bringing together pre-construction information, and provide the information designers and contractors need to carry out their duties.
  • Work with any designers on the project to eliminate foreseeable health and safety risks to anyone affected by the work and, where that is not possible, take steps to reduce or control those risks.
  • Ensure that anyone involved in the pre-construction phase communicates and cooperates, coordinating their work whenever required.
  • Collaborate with the principal contractors, keeping them informed of any risks that need to be controlled during the construction phase.

CDM 2015 replaces the old CDM coordinator role with the principal designer on the project team, such as an architect or engineer, but the two roles do not perfectly line up. CDM coordinators were responsible for advising on health and safety risk management matters, as well as CDM compliance. However, not all designers will be able to fulfil their design duties as well as possess the skills and expertise necessary to manage extra CDM 2015 health and safety and risk management responsibilities.

For example, if an architect is appointed as the principal designer, that architect will now shoulder the burden of being the sole point of responsibility for health and safety compliance. This broadens architects’ PI exposure, as they bear more health and safety responsibility than a normal architect, which, in turn, opens them up to the potential risk of criminal liability. Penalties for corporate manslaughter or breaching health and safety regulations include an unlimited fine, two years in prison and director disqualification for up to 15 years.

The architect’s PI insurance will only cover defence costs if they let their insurer know they accepted the principal designer role and its extra responsibilities. If not, the architect will likely be on their own.

Because PI insurance protects against claims of professional negligence, it is the responsibility of principal designers to alert their insurer of their extra principal designer responsibilities, as PI insurance needs to match up with the duties undertaken by the professional. The insurer cannot be expected to know about the principal designer’s extra responsibilities unless it is notified.

If principal designers do not have the required skill sets to handle those responsibilities, they can subcontract them to a health and safety professional to fulfil that specific role. However, if those responsibilities are subcontracted, principal designers would have to consider the risk of the health and safety professional not having adequate insurance cover, leaving them again exposed to the potential risk of criminal liability

Do not assume the role of principal designer by default. Before you undertake the principal designer role, be sure to consider carefully whether you have the expertise and ability to manage the role’s extra responsibilities. Also, remember to notify your Insurance Broker as forgetting to update your policy could lead to disastrous results !

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