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Professional indemnity insurance - what could possibly go wrong?

Just a few brilliant disasters ......

Things don't always go right in the world of professional services. Sometimes the unexpected happens, creating a headache for the experts and, all too often, an income stream for the lawyers. You don't often read about big payouts from professional indemnity insurance, but that doesn't mean that they don't occur; many architects, engineers, surgeons and designers will have reason to be grateful that they had the right kind of cover in place at the moment when it was needed.

The swaying bridge

The designers of the Millennium Bridge over the Thames at Southwark in London faced a particular difficulty. Planning restrictions on the height of the footbridge meant that the suspension cables had to be sited below the deck level. Consequently the bridge had a novel design, and its behaviour, when pedestrians began to use it, was unanticipated. The bridge had a pronounced tendency to sway, which led to its immediate nickname, the "Wobbly Bridge".

Research by the engineering department at Cambridge University concluded that the unexpected wobble, called 'synchronous lateral excitation", was caused by the behaviour of the pedestrians crossing the bridge; when walkers encounter a sway, they unconsciously adapt their gait to match it. This exacerbates the swaying motion, leading to a feedback effect which worsens the problem, particularly if the bridge is crowded.

The bridge was modified by the engineers at a cost of over five million pounds. They installed 37 fluid-viscous dampers and 52 tuned mass dampers to control horizontal and lateral movement. The problem was solved, but the nickname remains.

Imperial and metric units -the Mars Climate Orbiter and others

Amazingly, American scientists and engineers often use pounds, gallons and inches, rather than the metric system which was adopted long ago by the rest of the world. The Mars Climate Orbiter was lost by NASA on September 23rd 1999, 286 days into its voyage to the red planet. It was later discovered that the source of the problem was error in converting imperial units into metric when sending instructions by radio to the spacecraft's thrusters. The cumulative effect of repeated mistakes put the spacecraft 60 miles off course.

This was not the only aviation disaster to be caused by problems in converting units. In 1983, Air Canada’s first plane to use metric measurements ran out of fuel in mid-air because of errors in calculating how many litres of aviation gas they needed to load. Fortunately, the plane was landed without loss of life.

Similar mistakes have occurred many times in history. Christopher Columbus thought he was in the East Indies when he had reached the Bahamas; the problem was partly due to his navigator's confusion of Roman with nautical miles.

A hard mistake to correct - misspelled tattoos

When David Beckham had the name of his wife Victoria tattooed on his left arm, experts in the Sanskrit language pointed out that the tattoo artist had incorporated a superfluous letter equivalent to "h" in the first syllable. Tattoos are notoriously difficult to change or erase, and it has been demonstrated in court that tattoo artists breach their duty of care if they misspell a word. Spelling mistakes in tattoos seem to be remarkably common, perhaps because the tattooist is concentrating on the design rather than the words themselves. Customers displaying sentiments on their skin such as "No Regerts" or "No Ragrets" may still regret their actions enough to seek compensation, which is one of many reasons why professional liability insurance is a good idea for tattoo artists.

A building that melted a Jaguar

A notorious recent example of professional liability concerned the dramatic 37-storey building at 20 Fenchurch Street in the City of London. Known as the "Walkie-Talkie" because of its unique curved shape, the building turned out to have properties which had not been anticipated by the architect, Rafael Vinoly, or the developers, Land Securities and Canary Wharf. The glazed concave facade acted like a lens, focussing the sun's heat onto a small patch of road on which Martin Lindsay had parked his Jaguar XJ. Parts of the car melted in the heat. Mr. Lindsay said that he returned to the vehicle to find a note from the construction company reading "your car's buckled, could you give us a call?". He was compensated, and steps were taken to reduce the reflective effect of the glass.

Cosmetic surgery that cut short a business career

A successful businesswoman, Penny Johnson, sued her cosmetic surgeon for a proportion of the £54 million which she said she had lost as a result of a botched facelift. The procedure had left her with a facial twitch which hampered her ability to conduct business meetings. The twitch, along with pain and an involuntary grimacing expression, were the result of nerve damage incurred during the operation. The court awarded her over six million pounds.

Cosmetic surgeons run a high risk of litigation when things go wrong. The Medical Defence Union, which represents members of the medical profession when they are accused of malpractice, reported in 2012 that non-essential operations such as face-lifts, breast surgery, and nose reshaping were responsible for eighty per cent of legal actions against plastic surgeons, and that payments could be as high as half a million pounds. Also, compensation claims are upheld in 45 per cent of cosmetic cases, compared with 30 per cent for all medical compensation claims. When cosmetic surgeons make mistakes, particularly when their clients are celebrities, they risk seeing their work featured in the popular press.

A cinema built in the wrong place - twice

A council in Cambridgeshire ordered Britannia Construction, the builders of a cinema complex at St. Neots, to rebuild it when it was discovered that it was about 75cm out of position. It was dismantled and the builders began again, only to discover that it was now in a different wrong place. Luckily for the developers, Turnstone Estates, the council (presumably fearing that their cinema might never open) granted retrospective planning consent for its new position. It was estimated that the error cost a million pounds to rectify; Britannia blamed the architects for errors in the initial drawings.

So, all we can say is - thank heavens for professional indemnity insurance!!

Is there a "compensation culture"? The Prime Minister thinks so

In 2013, the Prime Minister David Cameron was critical of modern trends in litigation. He said; “It is simply much too easy for no-win-no-fee lawyers to encourage trivial claims against businesses, which end up settling out of court because it’s too expensive to fight the case. It’s a huge part of our compensation culture and it must change.” When large sums of money are at stake, professionals who ignore the need for indemnity insurance do so at their peril.

Prudent Plus Ltd is an introducer appointed representative of Seopa Ltd, of Blackstaff Studios, 8-10 Amelia Street, Belfast, BT2 7GS which is Authorised and Regulated by the Financial Conduct Authority number 313860. These facts can be checked by visiting the FCA website.

We do not give financial advice on this website. If in doubt get professional advice and always read the policy information before purchasing an insurance contract.