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Single Project Professional Indemnity Insurance (SPPI)

Single Project Professional Indemnity Insurance is a type of professional indemnity insurance for project developers, designers, engineers and architects participating in a single project, where professional indemnity insurance is required.

Coverage, extensions and exclusions are consistent with the standard professional indemnity insurance policy, the difference being that the policy is concluded for the duration of the project and required post-launch warranty period. Single Project Professional Indemnity Insurance covers the relevant claims against any insured project participant throughout the entire project life cycle – from concept drawings to completion of construction, as well as any extended discovery period of up to 10 years or more.

The insured is usually a general contractor or project developer. It is the responsibility of the project developer to insure the liability.

This is much more convenient for clients since they do not need to regularly monitor the annual policies of all project participants regarding the exhaustion of limit, renewing the policy and agreeing on insurance terms and conditions. This is also convenient for project contractors since the cost of insurance is transparent and can be easily spread across all project participants, and is usually proportional to the fees of the participants

Examples of SPPI Claims from International Experience:

1. Supports of the viaduct

A claim for over $75 million was filed due to design errors in the repair of a viaduct over a river. The scope of work included the design, supply and installation of bridge supports. Cracks appeared in the bridge supports. The supports were an integral component of the project, providing expansion and contraction of the bridge. During the investigation, it was found that the calculations of the tolerance levels for the design of the viaduct supports were not performed correctly. The SPPI policy covered the client's remediation work, including replacing the supports with supports of an alternative system, as well as traffic management costs during the repair period.

2. Tunnels under a riverbed

To organise the movement of vehicles, two tunnels under a riverbed were designed and built. Errors in the design of elements of the concrete cladding of the tunnel led to overload, which, in turn, negatively affected the sealing of the joints between the elements. The SPPI policy covered the client's redesign costs, construction delays and cladding replacement work totalling $10 million.

3. Seaside timeshare apartments

After the design and construction of the rental apartments were completed, some of them were found to have mould immediately after opening. Mould was severe during the rainy season, especially after a hurricane, and continued to spread inside the premises. There was an unpleasant odour in the buildings and moisture entered through the outer walls. During the investigation, it was found that the project and specifications of construction works did not take into account the climate features of the construction area. The SPPI policy covered the client's legal fees and wall replacements in the apartments for an amount exceeding $17 million.

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