Study On Professional Liability Insurance For Construction Consultant

The industry of Construction Consulting industry in China is developing very fast. With the construction consulting firms and engineers showing more and more importance, the professional risk they have to take also will increase. However, the pattern of indemnity limits their professional liability, causing that the professional liability is not matched professional risk. If the construction consulting firms and engineers are requested to undertake the complete economic compensation responsibility, they are incapable to afford only depending on themselves. Practices at home and abroad show that building the system of Professional Liability Insurance (PLI) is an important measure to improve the situation, and it will help to protect the benefit of owner and the third party, help the construction project of our country to be in line with international standards, help to set up the market operation mechanism of selecting the superior and eliminating the inferior. Therefore, PLI will play the important function of pushing and ensuring on the development of construction market and the whole economic development.However, considering the the special background and intensity of development of our country manages, we do not have ripe experience and can be drawn lessons from directly to develop PLI for the construction consultants. So, as to the PLI of the developed country, we should combine the real characteristic of our country, set up PLI system for the construction consultants which accords with the current situation demand. As to this, on the basis of study on system of PLI for consultant aboard and current situation of that in china, with the reference of foreign experiences and lessons, considering our national conditions, the thesis has made qualitative and quantitative analyses focusing on PLI for the construction consultants contract elements, development ideas and measures.In view of the key research content, the paper provides the suitable mode for China is that Annual Insurance on Claims Made Basis, Project Insurance on Occurrence Basis, Construction consulting firms as named insured. In virtue of the expected utility function, the paper analyses the substitution relationship of the deductible and the premium and shows the method of determining the premium of PLI for construction consultants. Finally, combining the knowledge of the present status, the paper, from government, industry associations and insurance intermediary angles, gives a guiding line and the measure for putting this insurance into operation in China..