Professional Indemnity Insurance - Update 2026

So far in 2026, the UK construction professional indemnity market remains comparatively soft. However, the underlying liability environment is becoming increasingly complex. Building safety, artificial intelligence, data centres, transfer slabs and climate-related risks are all capable of generating significant new exposures for construction professionals and their insurers. Building Safety The Building Safety Act 2022 (“BSA”) continues to dominate the construction PI landscape, with the courts increasingly defining the scope of its extensive remediation and recovery provisions. In Crest Nicholson v Ardmore [2026] EWHC 789 (TCC), the High Court significantly widened the practical reach of Building Liability Orders (“BLOs”). The Court confirmed that an anticipatory BLO may be made before final determination of liability; that an adjudicator’s decision can constitute a “relevant liability”; and that a BLO may attach to that interim adjudication liability. BLOs are also not confined to insolvent SPVs or parent companies and may extend to other associated companies where it is “just and equitable”. The decision potentially enables claimants to use adjudication as a comparatively rapid route to establish the liability upon which a BLO application can then be based. In Mulalley v Sto, the Court provided further guidance on BLOs and remediation costs following the failure of a cladding-system supplier. Of particular significance was the Court’s willingness to impose substantial liability upon an associated company and its recognition that courts will generally be slow, with hindsight, to criticise reasonable expenditure on remedial works. The same broad approach can be seen in recent Remediation Contribution Order (“RCO”) decisions. In Edgewater (Stevenage) Ltd v Grey GR Ltd Partnership [2026] UKUT 18 (LC), the Upper Tribunal confirmed that RCOs may impose joint and several liability and adopted a broad approach to both the “just and equitable” test and the meaning of a “building safety risk”. Similarly, in Secretary of State v EDR Builders, the Tribunal held that remediation costs need not represent the cheapest possible solution. Provided the remedial scheme falls within the range of reasonable responses, the availability of a cheaper alternative will not necessarily reduce recovery. These decisions suggest an increasingly claimant-friendly approach to remediation liabilities and potentially greater quantum exposure for PI insurers. In Durkan Estates Ltd v Wallace Estates Ltd [2026] EWHC 2003 (TCC), the TCC also demonstrated the factual complexity likely to arise in BSA remediation disputes. Allegations of delay involved questions of causation, responsibility, waiver, estoppel and regulatory approvals, making summary determination inappropriate. For insurers, this points towards potentially lengthy, evidence-heavy and expensive remediation disputes. Artificial Intelligence AI presents a rapidly developing professional negligence risk. Although not a construction case, Cork v Smith [2026] EWHC 1199 (Ch) emphasised the fundamental principle that professionals remain responsible for their work and cannot simply outsource professional reasoning to AI. That principle is particularly relevant following the introduction of RICS’ mandatory global standards on responsible AI use, effective from March 2026. Surveyors using AI must understand the systems involved, assess and record whether their use is appropriate, maintain AI registers, supervise and verify outputs and inform clients appropriately. For PI insurers, underwriting and policy wording should therefore address uncontrolled or unsupervised AI use and any resulting coverage uncertainty. Data Centres The rapid expansion of data centres creates substantial opportunities but also significant professional liability exposure. Compressed programmes and highly technical projects increase the risk of inadequate scopes of service, inappropriate contractual liability, design and delay claims, electrical and fire losses, cyber risks and substantial environmental demands. Insurers should pay particular attention to contractual risk allocation, liability caps, net contribution clauses and the preservation of reasonable skill and care obligations. Transfer Slabs Transfer slabs are emerging as another potentially significant source of historic construction PI claims. Concerns particularly relate to punching shear, where concentrated column loads can cause localised slab failure with potentially serious structural consequences. Regulatory warnings, new Institution of Structural Engineers guidance and remediation proceedings concerning existing developments are increasing scrutiny of buildings constructed over the last two decades. Insurers should anticipate notifications involving historic design, construction and structural assessment, together with substantial investigation and remediation costs. Climate Risk Climate change is also beginning to influence construction PI exposure. Increasing wildfire risks, for example, may generate claims alleging failures in design, specification, professional advice and risk assessment. As climate risks become increasingly foreseeable, the standard expected of construction professionals is likely to evolve accordingly. Claims may also involve multiple professionals and substantial expert evidence, increasing defence costs and complicating reserving. Conclusion The PI market may remain soft, but the risk environment is not. The BSA is expanding potential routes to recovery, while AI, data centres, transfer slabs and climate change are creating new areas of professional exposure. For construction PI insurers, careful risk selection, policy wording, reserving and early claims investigation will therefore remain critical as these developing risks translate into notifications and claims.