In this chapter of our Annual Insurance Review 2020, we look at the main developments in 2019 and expected issues in 2020 for miscellaneous professional indemnity.
Key developments in 2019
Miscellaneous professional indemnity remains a difficult category in which to identify sector wide trends; the inherent nature of the class is that it covers a disparate range of professionals. Nevertheless, last year we predicted that the class would refine itself into subclasses (which would then arguably no longer be 'miscellaneous', but rather emerging professions). One such class we foresaw was agriculture. In fact, whilst agriculture continues to evolve, it is equine which has emerged as a big risk area.
There is no real definition as to what equine entails save that, naturally, it must relate to horses. However, with an estimated 1.8 million horse riders (and rising) in the UK, it is perhaps unsurprising that equine claims are increasing. Claims arise from many aspects of horse ownership and riding, such as personal injury, misrepresentation arising from the sale and purchase of horses, doping, stable management and damage to property. We also see claims from the care of horses, both in stables and riding schools.
With many animal related claims, and particularly those arising from personal injury and damage to property, essentially amounting to strict liability (see Mirvahedy v Henley), there is plenty of potential for claims against horse owners and riders, and plenty of scope for insurers to smell out an opportunity.
What to look out for in 2020
One current area of business that will continue to attract attention in 2020 is claims against Approved Inspectors i.e. inspectors authorised by Construction Industry Council Approved Inspectors Register (CICAIR) to carry out the inspection of plans and building work. Once virtually immune from harm due to their employ by the local authority, Approved Inspectors are increasingly privately employed and, following the events at Grenfell, have attracted attention. The Hackitt Review recommended the restriction of their role, albeit this was strongly resisted by the Approved Inspector community.
However the Courts have, this year, clarified the duties owed by Approved Inspectors. The case of Heron's Court v NHBC Building Control Services Ltd & others confirms that they do not owe duties to lessees under the Defective Premises Act. This has provided welcome clarification and we anticipate will prevent an increase in claims. The case established that the essential function of the Approved Inspector is to certify whether the design or construction is lawful in a building sense, and not to check whether the work was done in a workmanlike or professional manner with proper materials so that the dwelling would be fit for habitation when completed (which duty still lies with other construction professionals).
However, it will be interesting to see what happens in 2020. Contractors and insured professionals have looked to recover sums paid out in claims, and it is possible that Approved Inspectors will continue to be the target of recovery claims in certain (albeit more limited) circumstances. This is therefore arguably an emerging class of risk in its own right, rather than merely a miscellaneous risk.