Architects Professional Indemnity Insurance

An architect's exposure is unusual in two ways: the thing you produce is relied on for the life of a building, and the claim usually arrives when something goes wrong on site long after you signed the drawing off.

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Design Liability, And Who It Follows

Professional indemnity is a condition of registration, and the Architects Registration Board requires registered architects to hold adequate and appropriate cover. As with accountancy, the minimum is a floor. What actually sets the right limit is the value and nature of the projects, because the loss flowing from a design error is the cost of putting the building right rather than the fee you charged for the drawing.

What makes architecture harder than most professions is everything that attaches to it on a construction project: collateral warranties, net contribution clauses, design and build novation, and whatever the appointment says about liability periods.

What Architects Insurance Covers

Professional indemnity

Claims that your design, specification or contract administration caused a loss. The core cover, required for registration, and the one that has to run continuously because claims arrive years later.

Run-off cover

Keeps the policy answering after the practice closes or you retire. Given that building defect claims can surface more than a decade later, this is a longer commitment in architecture than in most professions.

Collateral warranty exposure

Warranties given to funders, purchasers and tenants extend who can sue you and sometimes for how long. The policy needs to be comfortable with the wording you are signing.

Public liability

Injury or damage arising from site visits and from your office. Separate from design liability and much smaller, but required by most site access arrangements.

Employers' liability

Compulsory from the first employee at a £5 million statutory minimum, including part time and student placements.

Office, cyber and legal expenses

Contents and business interruption, cyber for the drawing files and client data, and legal expenses for fee recovery and employment matters.

Where The Cover Stops

Wordings differ between insurers, so treat these as the usual position rather than as universal fact. Where one of them matters to you, it is worth checking on your own schedule before you need to.

Claims made, with a long tail

The policy in force when the claim is made responds, not the one in force when you drew it. Building defects surface over many years, which makes continuity and the retroactive date more important in architecture than almost anywhere.

Fitness for purpose obligations

Professional indemnity covers negligence, meaning a failure to exercise reasonable skill and care. An appointment that promises a result, or warrants fitness for purpose, imposes a stricter standard that most policies exclude. Those clauses get added quietly to appointments and warranties.

Liability assumed under contract

Where an appointment or warranty gives away more than the law would impose, the extra is often outside cover. Net contribution clauses work the other way and are worth having.

Cladding, fire safety and combustible materials

Many PI policies now carry exclusions or restrictions around cladding and fire safety work. If your practice has touched external wall systems, this is the first thing to check on the schedule.

Known circumstances

Anything you are aware of before inception is excluded. A dispute brewing on site needs notifying as a circumstance at the time, not mentioning at the next renewal.

Collateral Warranties Change Who Can Sue You

On most projects of any size you will be asked for collateral warranties: to the funder, to a purchaser, to tenants, sometimes to several of each. A warranty gives a third party a direct contractual route to you that they would not otherwise have.

Three things in them matter to the insurance. Whether the obligation is reasonable skill and care, which is insurable, or something stricter like fitness for purpose, which usually is not. Whether there is a net contribution clause, which limits your share to what is fairly yours rather than leaving you to carry the whole loss because the contractor has dissolved. And how long the warranty runs, because a twelve year deed is a twelve year exposure.

Send proposed warranty wording to your broker before signing rather than after. Amendments at that stage are ordinary and a signed warranty your policy will not back is a problem you cannot unwind.

Novation On Design And Build

Design and build procurement routinely novates the design team from the employer to the contractor partway through. You begin working for the client and end up working for the builder, with the same drawings and a different master.

The insurance questions are about what you are agreeing to in the novation and in the contractor's own terms, which are often less favourable than the original appointment. Watch for obligations that go beyond skill and care, for liability caps being removed, and for warranties bundled into the deal.

It is entirely insurable and routinely done. What causes problems is signing the novation without anyone reading the liability terms, which is easy when it arrives late on a project everyone wants to start.

Cladding And Fire Safety Have Changed The Market

Since Grenfell and the Building Safety Act, professional indemnity for anyone involved in external wall systems has tightened sharply. Many policies now carry cladding exclusions, restricted limits for fire safety work, or aggregate rather than any one claim limits for it.

If your practice has worked on buildings with external wall systems, at any point, this is the first thing to read on your schedule. The exclusion may apply to past work as well as future, and the extent of it varies substantially between insurers.

It is also the area where the market is still moving, so a renewal that looked the same as last year may not be. Read the exclusions rather than the premium when the terms come in.

How To Choose A Broker For An Architectural Practice

Architecture is one of the professions where the policy wording does more work than the premium, because the exposures attach through contracts you are asked to sign. We are an FCA regulated broker and will not claim to be the best choice. These decide it.

Will they read your appointments and warranties before you sign?

This is the single most useful thing a broker does for an architect. A warranty promising fitness for purpose is usually outside cover, and that is fixable before signature and not after.

Do they know where your cladding and fire safety position stands?

Most policies now carry restrictions. A broker who can tell you exactly what yours says, and whether it reaches past work, has read it.

Can they state the retroactive date and the run-off position?

Building defect claims arrive over many years. Continuity is the cover, and a broker who cannot answer this has not looked.

Is the limit set on project values rather than fee income?

The loss from a design error is the cost of correcting the building, not a multiple of your fee. A limit anchored to turnover is anchored to the wrong number.

Have they asked about design and build novation?

If you work on D&B at all, the terms you end up under are the contractor's, not the client's. A broker who raises it is thinking about how you actually get paid.

Factually, we will read a proposed appointment or collateral warranty and tell you which clauses sit outside the policy before you sign it, we check the retroactive date and the cladding position when a practice moves to us and say plainly what is restricted, and we set the limit discussion around project values rather than fee income. We are a broker, so it goes to several insurers rather than one.

We do not publish a starting premium for architectural practices, because our book does not hold enough policies in the profession to support a figure we could stand behind.

What Moves The Price

Every policy is priced on the business behind it. These are the things that move the premium:

Project values and the types of building you work on
Any involvement with external wall systems or fire safety
Whether you work on design and build, and accept novation
Fee income and the number of qualified staff
The limit required, and whether defence costs erode it
Claims, circumstances and the retroactive date

We are a broker, so we take it to several insurers rather than quoting one. Call 02382 000820 for a quote.

What We Need To Quote

ARB registration and practice structure
Annual fee income and typical project values
Sectors worked in, and any external wall system involvement
Whether you sign collateral warranties, and typical wording
The retroactive date on your current policy
Any claims or notified circumstances in the last six years

Cover that often goes with this

The gaps we most often find sitting next to this policy.

Professional indemnityClaims made cover, retroactive dates and run-off explained in general.
Contractors all riskThe works themselves, on the projects your drawings describe.
Development and renovationWhere the design meets an existing building being altered.

Common questions

Is professional indemnity compulsory for architects?+

Registered architects are required to hold adequate and appropriate professional indemnity cover as a condition of registration with the Architects Registration Board. As with other professions the required minimum is a floor rather than a recommendation, and the right limit depends on the value of the projects and the cost of correcting a design error rather than on your fee income.

Does my PI policy cover collateral warranties?+

It depends on what the warranty says. An obligation to exercise reasonable skill and care is the standard professional indemnity covers. A warranty promising fitness for purpose, or guaranteeing a result, imposes a stricter duty that most policies exclude. Net contribution clauses are worth having because they limit your share to what is fairly yours. Send proposed wording to your broker before signing, because amendments at that stage are routine.

How does cladding affect architects' insurance?+

Substantially. Since the Building Safety Act, many professional indemnity policies carry cladding or fire safety exclusions, restricted limits, or aggregate rather than any one claim limits for that work. The restriction may reach past work as well as future, and it varies a lot between insurers. If your practice has touched external wall systems at any point, read that section of the schedule before the premium.

What happens to my cover when I retire or close the practice?+

You need run-off cover, and in architecture it is a longer commitment than in most professions because building defect claims can surface more than a decade after completion. Cancelling on your last day leaves every project you ever worked on unprotected. Your registration body and any purchaser of the practice will both expect it to be arranged.

Am I still covered after novation on a design and build project?+

Usually, but the terms you end up working under are the contractor's rather than the client's, and they are often less favourable. Watch for obligations beyond reasonable skill and care, removal of liability caps, and additional warranties bundled into the deal. It is entirely insurable; the problem is signing the novation late in a project without anyone reading the liability terms.

Who insures architects in the UK?+

Professional indemnity for architects is written by a defined set of specialist insurers, and the market has tightened considerably around fire safety and external wall systems. Several of the relevant insurers work through brokers rather than direct. What separates placements is the wording, particularly the cladding position, the retroactive date and how contractual liability is treated, rather than the premium.

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