Professional indemnity for Architects

Architects Guide to Professional Indemnity Insurance

We have specialist knowledge of and relationships with insurers in the professional indemnity market for Architects and offer a range of services that help established and new firms obtain their cover quickly and at a competitive premium.

Getting a quote for professional indemnity insurance

Architect drawings
Architect

Professional indemnity is complex form of insurance. When arranging this cover, most firms will require some tailoring of their policy to ensure it provides exactly the right needs and protection for their firm. This may be a small tweak to the policy such as increased Pollution Cover or something more substantial like higher level of Fire Safety Cover….basically things to help you win contracts whilst still protecting your firm!

When buying this type of commercial insurance specialist advice from a broker is normally obtained. A good broker lowers the premium cost as well as providing valuable advice and support, especially on warranties/contracts and claims.

Examples of claims against Architects

Professional negligence claims against architects are surprisingly common. Claims and Legal Costs can be extremely high, even when the architect is not at fault. Here are some examples of professional indemnity insurance claims many architects will relate to:

Architect looking at construction work
1

Background - Architects were engaged to design and supervise the construction of a new office block. Once construction was completed dampness began to appear at the property. The builder and the architect were both joined in the action for substantial damages by the property owner. Outcome - The architect’s professional indemnity insurer defended the action. Specialist solicitors were appointed by the insurer and a successful defence was provided. The legal defence costs were €300,000 and covered by the professional indemnity policy even though the Architect had no wrongdoing

Architect signing off
2

Background - Architects signed a certificate of practical completion on a residential new build. Various snagging issues arose that went unresolved by the contractors who then blamed design faults as the cause of the problems. Outcome - The insurers paid €450,000 in settlement and costs.

Architect looking at Plans
3

Background - Various problems with the construction of a new house caused construction delays and additional costs for the project. This led to a claim against the Architect who was involved in the buildings planning, design and site inspection. Outcome - Amount paid €65,000.

How is the premium calculated?

The rating of an Architect firm is not a simple process. Premiums are calculated based on many factors which will include:

• The claims history
• Categories of work undertaken
• The number of partners or directors to staff ratios
• Firm’s fee income

To assess the risk the underwriter will usually require a fully completed proposal form which they will consider in detail. They will also look at the firm’s website or they may even look deeper online into a firm’s or partner’s background

How it’s worked out

Does a good impression really matter?

Presentation of your firm is more important than you might think. You are essentially asking an underwriter to back your firm and they will be assessing the professionalism and quality of your firm and if the information is badly presented, it may influence their judgement and the premium they offer or they may even decline to quote. This is where a specialist Broker like Dolmen can be key to getting the best terms available, by reviewing your submission with you and not simply forwarding a poorly/incomplete submission to potential insurers.

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Any claims in last 5 years ?

Check out the Insurance Glossary for a full understanding of all the terms mentioned on the website.