Professional indemnity insurance for architects is a liability insurance which covers the architectural firm and its employees against claims arising from negligent acts and errors and omissions in the performance of architectural services.

• Criminal acts & fraud

• Nontraditional practices

• Willful negligence

• Terrorism

There are various factors which determine the premium amount under this insurance. It includes limits or deductible you choose, your firm size, size of the project and claim history.

Yes, there are some insurers who offer project-specific insurance. Project-specific insurance usually provides coverage for a pre-selected number of years for the design and construction phase and also discovery period after construction phase is complete.

Yes, architect’s professional indemnity insurance policy does provide cover for the settlement of lawsuits. The extent of settlement is determined by the type of the policy and sum insured.

As an architect, you make thousands of decisions every day. Also, these decisions may constantly be revised by clients, who might also make some sudden changes due to budget. But what if your decision turns awry, and your client sues for that? Not only monetary, but it will also hurt your reputation as well.Architects professional indemnity Insurance safeguards you in the event of an error or omission on your part. Further, the insurance policy would assist you in defending the claim and cover the legal costs, if any.

Now let’s have a look at some of the scenarios where architects’ professional indemnity Insurance can help you:

1. Negligence or Breach of Duty - As an architect, you could be sued if the other party incurs losses by acting upon your bad advice. If you have prepared the design work for your client which is faulty, a legal suit can be brought against you.

2. Infringement of Intellectual Property Rights - It could include allegations that you have used the copyright design without the owner’s permission or used the content of a publication or website without permission.

3. Breach of Confidence - A legal suit can be filed against an architect if he/she shares the sensitive or confidential information without the consent.

4. Defamation - If an architect makes false or damaging claims about a person, he/she could be sued for this. Many young architects get the surprise of their lives when they learn that an architect can be held liable for the negligence of others working on the project or estimate or delay in construction. Further, the claims can also be based on planning or studies, and it is not necessary for the architect to be the main architect of the project. Moreover, a client can refuse to pay for the work and held the architect liable for negligence. Professional liability claims can also arise as the result of a failure to manage expectations, particularly, when the client has little experience with the construction projects. Though their understanding of an architect’s scope of work and the quality & timing of the final product may be vague, that doesn’t mean the claim will not be filed. Many times, it happens that an architect is reluctant to explain delays or cost overruns to their client, hoping that they will ‘pace up’ in the future. However, that lack of communication may give rise to a bigger surprise for the client. Even if an architecture firm has skills and expertise on a certain project type, too many commitments can result in client’s frustration and lack of trust. These are such situations which can give rise to professional liability claims and that too when there is no failure on the part of the architect to design a safe building.

Minimizing Costs

By opting for architects’ professional indemnity Insurance, it is viable to restrict the monetary loss which otherwise you would have to bear on your own. Usually, a professional indemnity insurance for architects include the following:

• Negligent act or omission

• Civil liability

• Irrecoverable loss

• Defense costs

• Unintentional defamation

• Bodily injury or property damage

• Loss of third-party document or data

• Legal expenses

• Breach of confidentiality

The decision to purchase architect professional liability Insurance is indeed a breaking point moment for most of the architects and young companies. It also means that the company has grabbed a project on a high scale or a significant budget or the client has approached the firm with concerns about a particular project. Or it simply means that the architect or architect firm is getting serious about its business and future.

What actions can result in claims?

Many young architects get a surprise when they are being told that they can be held liable for the negligence of contractors and others who are working on the project. Moreover, that negligence claims can also be based on the faulty cost and delay in construction. In some situations, claims can also be based upon the planning or feasibility of studies, and it is not necessary that the architect should be the main architect of the project. Also, it has been seen that not all clients pay fees and as a result, it is common for an architect, who brings a suit to recover fees, subject to the counterclaim of negligence.

In general, architect professional liability claims are likely to arise from the failure to meet the expectations, particularly, where the client has limited experience with other construction projects. As a result, the understanding of a client of what comprises the scope of work and the quality and timing of the final work may be unrealistic. However, it still doesn’t mean the claim will not be filed. Further, an architect may not be keen on explaining delays or costs overruns to the client, ‘hoping to cover’ any delay in the long run. However, that lack of communication may turn into a bigger surprise for the client. In those situations, also where the architect has clear skills and expertise on a certain project type, too many commitments can actually give rise to client’s lack of trust and frustration. These are all such situations where architect professional liability claims may arise without a direct failure on the part of the architect or firm in designing safe and high-quality buildings.

The right time to buy architect professional liability Insurance is before you start working on any project. In case, you have already initiated the project, the architect professional liability Insurance Company will not cover previous claims.

Consider this: A renowned architect, Rajiv bagged a huge contract of designing the map of a two-floor school. On May 23, 2016, he started working on the project. After 15 days, he decided to purchase the architect professional liability Insurance. Here, the insurer did not cover the previous work, even the policy bought by Rajiv was for the ongoing project.

In the above example, Rajiv could have to get coverage for the past work also if he had added the retroactive date in its policy.

Usually, a retroactive date is a date from which you have held uninterrupted coverage. The purpose of this cover is to exclude all the claims which arise from work done before the date shown on the policy. It means, if you have architect professional liability Insurance since you started the work, you will be covered for all the work which you have done in the past, provided there is no break in the insurance cover.