Frequently Asked Questions

We are a consultant using the NEC4 Professional Service Contract (PSC). How and where do we state our professional indemnity insurance level and limitation of liability? Do we show this in the contract data insurance table and under the sentence ‘The Consultant’s total liability to the Client for all matters arising under or in connection with the contract, other than the excluded matters is limited to... ’. Also, should we show it under Option X18 on limitation of liability?

The insurance table deals with the insurances required and where the minimum levels of that insurance can be found, which is in the contract data. If a claim comes in higher than the insurance level, you will still be liable for paying the higher amount and need to use your own funds to cover this. And another important point is that the limit is in respect of each claim is without limit to the number of claims, see the entry in the contract data on page 59. Therefore, this does not deal with the overall limit of all claims.

Clause 87 deals with your total liability as to all claims from the client, excluding the excluded matters. Again, this refers to an entry in the contract data. If the client does not want to limit your liability, that entry is left blank. Otherwise, the total limit of your liability to the client (excluding the excluded matters) will be the limit set out in that entry.

As for secondary Option X18, this covers the limits of two specific types of liabilities. You and your client will probably need to discuss whether these will be needed in this particular contract this with your respective insurers. The last clause in X18 sets the time limit which both parties’ liabilities would run for. It would only be used if the law of the contract, as stated in the contract data, did not set such limits. If you ae unsure about that, you should seek legal advice.

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