All architects need insurance. As architects work with members of the public and give professional advice, they are at risk of various types of liability claims being made against them. Insurance offers protection from these claims by paying for legal costs and compensation if they are found liable. Insurance experts NimbleFins can help architects find joint professional indemnity and public liability insurance policies for architects and list specific architect insurance brokers.
While many insurance types may be needed by a self-employed architect or an architecture practice, there is one policy all architects must have. As stated in the Architect’s Code, which is the standard of conduct written out by the Architects Registration Board, all architects are required to have a professional indemnity insurance policy.
Within the Architect’s Code, Standard 8 lists the requirements of insurance for architects. It says:
“Architects must have an adequate and appropriate level of insurance which is sufficient for any potential claims that could be made against them. This must also be adequate cover for yourself, your practice and your employees. This cover must be maintained at a minimum level and include run-off cover.
“Insurance cover must also be extended to work carried out beyond the architect’s main practice or employment.
“As an employed architect, you are expected to make every effort in ensuring an appropriate level of insurance cover is being provided by your employer.
“If asked, you should be able to provide evidence of your professional indemnity policy.”
The Architects Registration Board recommends minimum professional indemnity insurance (PI) policy of £250,000 per claim. As architects deal with high stakes projects, the financial implications of mistakes can be costly. Depending on the type of work being carried out, the minimum limit may need to be higher.
Run-off cover is also required as part of PI insurance because claims can be made up to six years after the event or up to three years after it was noticed. PI insurance is sold on what is called a claims-made basis, which means the policy must be active at the time of the alleged event as well as when the claim was made. Run-off provides that cover if an architect has stopped working or retired.
Alongside PI insurance, architects may also need other insurances.
What insurances are needed can depend on if the architect is self-employed or employed by a practice.
Another vital insurance cover needed by all architects is public liability insurance. Public liability insurance provides cover for claims of property damage and personal injury.
If a claim is made, the cover will include legal costs, access to legal experts to fight against a claim, and compensation payments if the architect is found liable.
Other insurances that need to be considered include personal injury protection, employers’ liability insurance, business contents insurance and commercial vehicle insurance.
What insurance do architects need?
Circumstances and the type of work being carried out can affect an architect’s insurance types. However, two main policies are vital for all architects.
Professional Indemnity Insurance (PI) is a type of policy that all architects must ensure they have. And they must also ensure the level of the cover is adequate to meet a possible claim. This is because having PI insurance is a requirement of any practising architect as part of the architects’ standards of conduct, known as the Architects Act.
Written by the Architect’s Registration Board, the act says all architects, whether employed or self-employed, must have. Architects must also be able to provide evidence of having this type of policy in place when requested.
PI offers cover from allegations such as poor advice, mistakes in drawings or in plans, using incorrect materials, failing to consult with the client, failure to design within budget and failure to obtain planning permissions.
Public liability insurance is the other type of policy that architects need to protect themselves from claims made by members of the public. These claims could be in the form of allegations of property damage that of personal injury. In addition, the cover would provide the resources to obtain legal experts, pay for legal fees and compensation if required.
If an architect has employees, such as administrative staff or other architects, then employers’ liability insurance is legally required for the business. This type of policy will cover legal costs and compensation if an employee sues for becoming injured or ill due to the work they carry out.
Other insurances may also be needed, such as business contents insurance or commercial vehicle insurance. Architects may also feel they need personal injury insurance.
Why do architects need professional indemnity insurance?
In the interests of both the architect and the client, an adequate level of professional indemnity insurance, or other appropriate insurance, is required.
Under the Architects Act 1997, the Architects Registration Board was required to issue a standard of conduct, known as the Architects Code.
Under Standard 8 of the code, it says:
“Architects are expected to have adequate insurance for themselves as well as any architects they employ. This cover must be of an adequate limit to meet any potential claims.
“Insurance cover must be effective for work carried out away from the architects’ primary employment or practice.
“Employed architects have a duty to ensure their employer provides adequate insurance provision for them.
“When asked, architects must be able to provide proof of their professional indemnity insurance policy.”
Having insurance is vital in providing a form of protection against allegations of negligence or wrongdoing. For example, professional indemnity insurance can provide cover for allegations such as:
- Not designing a project within its budget.
- Not consulting with clients on decisions
- Providing poor advice
- Mistakes in plans or drawings
- Not obtaining planning permissions and causing delays
- Injury
No matter the extent of their experience or talent, all architects can make mistakes and find themselves facing a claim. There can be significant financial implications to fighting against a claim, whether it is unfounded or not. And appropriate insurance will also cover compensation payments if the architect is found liable.
Research sources:
- https://arb.org.uk/architect-information/architects-code-standards-of-conduct-and-practice/
- https://arb.org.uk/architect-information/professional-indemnity-insurance/pii-guidance/
- https://www.nimblefins.co.uk/business-insurance/architect-insurance
