The principle of professional indemnity insurance
As an architect you provide professional services and guidance that your clients depend on. Sometimes, unavoidably, errors and omissions occur and you could be blamed, perhaps unfairly, for the consequences. With clients becoming increasingly likely to exercise their right to take legal action, professional people must take steps to defend themselves against allegations of negligence. Whether you run your own practice, are full- or part-time employee, or simply give free or low cost advice, you run the risk of facing court action if things went wrong.
The potential consequences of allegations of negligence
They can be devastating - the cost of fighting a court case, along with paying an award of compensation, could have a significant impact on any professional person's livelihood. However, when you take out a PII policy, your insurance company should cover the costs that arise out of such allegations, leaving you to run your own business without worrying about your possible liabilities.
How much cover is enough?
The Architects Registration Board recognises that the circumstances in which claims of negligence can be made vary substantially. However, it is ultimately your own responsibility to ensure that you have adequate and appropriate professional indemnity cover. While the ARB’s Code of Conduct stipulates PI insurance as a condition of its membership, it will only consider cover over £250,000 to be adequate and appropriate. This is because small projects can still give rise to expensive claims.
How long should I be covered for?
An architect’s responsibility to maintain adequate and appropriate cover against PI claims does not end when he or she has ceased to practice. Whilst the majority of claims are made within a few years of practical completion, it is possible for clients to make claims for negligent acts in respect of projects completed many years previously. It is for this reason that the Architects Registration Board recommends a minimum of six years' run-off cover for all members who have ceased practicing.
Professional indemnity cover is one of the most important insurance policies an architect can purchase. While it will not prevent anyone from (allegedly) making a mistake, it should protect against the costs that can arise when things do go wrong.
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