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architects professional indemnity insurance, PI cover

Architects professional indemnity insurance

Architects Professional Indemnity insurance is available to buy both on line and by telephone from Hensure.

If you choose to buy your insurance online you can be assured you will still work closely with your own account manager or handler, who will get to know you personally and will understand your insurance requirements.

As you are aware the Architect profession as a whole is regulated by the Architects Registration Board (ARB). Architects Professional Indemnity insurance became mandatory for all qualified architects to have in 1997.

It is advisable to check if any work undertaken overseas is covered adequately by your policy.

 Wordings

As mentioned earlier the ARB lays down the rules for Architects Professional Indemnity insurance. Wordings are required to be written on a ‘Civil Liability’ basis (covering all civil liability, not just negligence).

The usual cover

Usually the limit of indemnity will be “any one claim” with legal costs in addition. The excess will not normally apply to insurers’ costs and expenses. If the cover is on a civil liability basis, then the cover would normally include negligence, liability for dishonesty, liability for lost documents, libel and slander and breach of warranty of authority.

What key elements need to be considered before obtaining Architects Professional Indemnity insurance?

Practice Size– Established from the number of partners and staff and the gross annual income of the firm.

Qualification and experience – Underwriters will want to satisfy themselves that an architect is suitably qualified and/or experienced to carry out the work undertaken on behalf of his client.

Type of work – Underwriters will be particularly interested in what type of work the architect is involved in and the split of annual income derived from each of these areas.

  • Architectural work: new build
  • Architectural work: non structural
  • Town planning
  • Feasibility studies
  • Architectural consultancy
  • Interior design
  • Quantity surveying:
  • Project managing and project co-ordinating

Contract sizes – The larger the contracts the more complex the job is likely to be leading to increased exposure.

Overseas exposure – Does the practice carry out work for overseas client? Underwriters are particularly interested in knowing if there is work for USA or canadian clients.

Retroactive exposure – Does the practice have an exposure to claims arising from past work, whether in the current firm or a former practice?

Claims experience – This will help to determine the quality of the practice’s work, staff, internal risk management and experience.

Typical  Professional Indemnity Policy Coverage for an Architect will include;

  • Civil liability
  • Negligent act error or omission
  • Unintentional intellectual property rights infringement (other than patents)
  • Unintentional breach of confidentiality
  • Unintentional defamation
  • Loss of third party documents or data
  • Computer virus transmission
  • Negligence of sub-contractors
  • Collateral warranties (limited to 2 assignments)
  • Adjudications under the Housing Grants Construction & Regeneration Act
  • Irrecoverable fees
  • Bodily injury or property damage arising from breach of professional duty
  • Defence costs
  • Court attendance costs
  • Breach of health & safety legislation

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Limits of Indemnity

The ARB makes it a requirement that architects carry a minimum limit of indemnity depending on their fee income in the past financial year as follows:

  • £250,000 where fees are less than £100,000 in the past financial year.
  • £500,000 where fees are greater than £100,000 but less than £200,000.
  • £1,000,000 for all practices with fees of greater than £200,000

Run-off cover

If the practice ceases, partners must ensure that they purchase run-off cover for at least six years. The limit of indemnity must be maintained at the highest level in the preceding three years to the cessation of the practice.

Click here for more information regarding getting a Professional Indemnity insurance quote

Get online quote now or contact Hensure today for more information.

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