NEC4 PSS - does X18 limitation exclude matters covered under insurances?

If under the Subcontract it’s a requirement for the Subcontractor to have insurance cover of say £10 million for professional indemnity, but under X18 the Subcontractor’s liability (for either indirect/consequential loss or for Defects found after the defects date) is limited to say £5 million, would this mean that the PI insurance is effective only to £5 million? Or are matters covered under insurances excluded from x18 under the PSS?

Firstly, secondary option X18 limits liability for the specified matters and amounts, as stated in the Contract Data. This includes indirect or consequential loss, which is the second limb under ‘Hadley v Baxendale’.

Any required insurances may provide some overlap with X18, although certain matters of liability are regulated by statutory controls, including the Unfair Contract Terms Act 1977, which provides that you cannot exclude or restrict liability for these.

The simple answer is that there is no simple answer and there are many different ‘heads of loss’ in terms of liability. Secondary Option X18 provides a sensible ‘safety net’ for some of these but particular advice should be sought on this issue to understand what your likely financial exposure could be.