Written by: Griffiths & Armour on: 31 May 2024
Why do Architects need Professional Indemnity Insurance?
Griffiths & Armour are recognised market leaders in Professional Indemnity (PI) insurance and risk management for construction professionals.
Throughout our history, we have established a reputation for delivering honest, consistent and informed advice. We are also renowned for developing exclusive and innovative PI insurance facilities – tailored solutions, with bespoke policy wordings and claims handling protocols, that are designed to safeguard our clients’ interests and support their future growth. From sole practitioners to some of the largest Architectural practices across the globe, we know the importance our clients place on having a trusted adviser.
Rather than relying upon the vagaries of the insurance market or regarding PI insurance as a commodity purchase, most Architectural firms are now looking to secure longer-term support from quality insurers with a genuine understanding of professional risk and the Architectural profession. They want to achieve realistic premiums reflecting the risk profile of their individual practice, a specification of cover that supports their business objectives and greater certainty in the event of claims arising. Against a background of increasing risk and tighter margins, the benefits of a carefully tailored insurance programme and the importance of effective risk management support are becoming increasingly clear, and it is this holistic approach that provides the foundation to our Architects’ PI insurance facilities.
With the PI market having entered an even ‘harder’ phase in recent years, it has never been more important for Architects to have access to specialist advice from a broker who understands their sector and how best to present their risk to insurers. We are not immune from the difficulties that exist but we are helping our clients to navigate through the challenges and have come to the assistance of many firms who struggled to source insurance solutions elsewhere.
Why do Architects need Professional Indemnity Insurance?
If you are an individual Architect or a firm of Architects providing a service or offering advice for a fee, or even gratuitously, you are likely to need Professional Indemnity Insurance.
Your clients are relying upon your expertise, knowledge, competence, and good judgment and irrespective of the size of the project you specialise in, from small residential to large, complex developments, there will be potential for professional liability exposure. As a construction professional providing advice, design, specification etc., you owe a duty of care to your client and certain third parties and where you are alleged to have breached that duty, you could end up facing a claim.
The cover provided under Professional Indemnity Insurance is primarily designed to protect you in those circumstances and even where you have done nothing wrong, the financial and reputational consequences can be significant.
What does PI Insurance cover?
Professional Indemnity insurance protects you and your business in the event of claimants suggesting they have suffered loss as a result of non-performance, breach of contract and/or professional negligence in the services provided. The insurance should also cover legal and other costs and expenses incurred in the defence of any claim.
Claims come in all shapes and sizes, from minor nuisance matters to catastrophic failures, but they can include claims relating to physical damage, consequential loss, personal injury or disputes around intellectual property etc. The key point is that the policy should respond to claims arising from the provision of professional services.
Why choose Griffiths & Armour?
A unique approach
We pride ourselves on adopting a unique approach to serving our clients’ interests and our clients seem to value that too. The knowledge gained from looking after 3,000+ consultancy firms allows us to design reliable cover that meets our clients’ evolving needs. A number of our PI insurance facilities have achieved global recognition and we invest considerable time working with individual firms on risk awareness – continually looking at new and innovative ways of communicating our messages on risk management.
We are committed to continually reviewing and enhancing our proposition, ensuring that it continues to provide a world class solution to our clients’ insurance and risk management needs.
Advocating on your behalf
Our involvement at all levels of insurance and construction not only allows us to provide informed, technical support to our clients but enables us to become real advocates for change; supporting initiatives to improve the risk profile of construction professionals and the legal landscape within which you are operating.
We care about the issues that affect our clients and invest considerable time and resource to engaging with Government, major procurement bodies and regulators such as the Architect’s Registration Board (ARB). These engagements are further evidence of how our work at all levels is helping to support the interests of our individual clients.
Our people
Our people are highly skilled, motivated and dedicated to always putting your interests first.
Brokers are encouraged and expected to build lasting relationships with their clients. They can expect their broker to handle the Professional Indemnity renewal process from the initial information gathering exercise, to securing terms from the insurance market, to presentation of terms and post-renewal support.
That process is characterised by continuous engagement throughout the ‘insurance year’. Whether we are providing contract review advice, offering claims management services, discussing our latest risk management material or providing general day-to-day insurance advice; our experienced team, which includes brokers, risk managers and in-house claims specialists, is fully accessible to support and respond to our clients on whatever insurance or risk management questions or concerns they might have.
Claims support
Unlike most insurance brokers, we have a specialist in house claims team who support our clients from initial notification, to post-settlement ‘lessons to be learned’. Our clients have access to the very best legal and technical advice through our long-standing relationship with a panel of solicitors and experts, each of whom have signed up to our unique claims handling protocols.
Our insurance market profile
Over many years, we have developed excellent relationships with most insurers underwriting Professional Indemnity insurance. Given the ‘long-tail’ associated with this class of insurance and the notoriously volatile nature of claims, we foster those relationships mindful that their continuity and sustainability are vitally important,
Our standing with insurers also enables us to establish facilities that are unique to Griffiths & Armour.
How much does PI Insurance cost for Architects?
The cost of PI Insurance will depend upon a range of factors such as the sector you are operating in, your risk profile and the limit of indemnity (amount of cover) you choose to purchase. Generally, Insurers will use your professional fess as the basis for premium calculation and it is important that you provide them with a clear overview of your firm.
At Griffiths & Armour we work closely with our clients; helping them to identify any particular risks their business presents, constructing a narrative around why those risks have been identified and explaining to insurers how they have been understood and mitigated.
Do you offer a convenient way to manage my PI Insurance renewal?
PiWorks is our industry leading online renewal platform, available to clients with Professional Indemnity (PI) Insurance via Griffiths & Armour. PiWorks is an efficient and convenient way for you to submit key information to support the renewal of your PI policy. It can also help you streamline your administration processes and saves you time by securely storing your key PI Insurance documentation in a one convenient document portal.
Get in touch with our team to find out more about how PiWorks could help you.
Which other classes of Insurance should Architects consider?
Given our history and standing within the construction sector, we are often considered to be synonymous with Professional Indemnity insurance. Whilst that is reflective of our position within the PI market, our knowledge and expertise extends across all classes of insurance.
We are well placed to support our professional clients with their general insurance requirements, whether that is Office Insurance arrangements, Motor fleet, Public Liability, Employers Liability or Directors & Officers etc.
Our WORKSPACEPLUS+ offering is designed specifically to provide you with everything a traditional office policy can plus a range of enhanced features that can be selected to shape your office policy around the precise requirements of your business.
Frequently Asked Questions (FAQs) for Architects’ PI Insurance
Here are the answers to some frequently asked concerns regarding Architects’ professional indemnity insurance, as well as other popular coverage, whether you’re new to obtaining business insurance or have been in the company for a while.
What is Architects’ Professional Indemnity (PI) insurance?
Professional Indemnity insurance protects you and your business in the event of claimants suggesting they have suffered loss as a result of non-performance, breach of contract and/or professional negligence in the services provided. The insurance should also cover legal and other costs and expenses incurred in the defence of any claim.
What kind of coverage does a self-employed architect require?
Whether you’re a self-employed architect or a business owner, there are a range of insurances such as property, business interruption, employer’s liability and public liability that will be required to cover your potential exposure. However, given the nature of what you do and your clients’ reliance of your professional services, Professional Indemnity Insurance will be central to your insurance programme.
If you’re not sure what coverage you require, one of our advisers would be delighted to assist you.
Does Professional Indemnity insurance cover Public Liability?
No, Professional Indemnity insurance is a class of insurance in it’s own right. Whilst similar losses may be covered under both classes of insurance, the purposes of the policies and the circumstances in which they respond are very different.
Professional Indemnity insurance is designed to respond where the claim has arisen from the provision of professional services.
Is Professional Indemnity insurance compulsory?
Professionals such as accountants, architects, engineers and solicitors will find themselves needing to hold Professional Indemnity insurance whether as a result of a legal requirements, the rules established by their professional institute or simply due to the demands of their client. Today, it would be very unusual to see any professional services agreement that does not impose a requirement to maintain PI insurance.
Is physical injury covered by Professional Indemnity insurance?
Professional Indemnity is designed to cover the insured’s liability for a variety of losses. All insurance policies will contain limitations and exclusions but subject such restrictions, Professional Indemnity insurance would be expected to cover the insured in respect of liability for personal injury arising from the provision of professional services.
What is the Limit of Indemnity under a Professional Indemnity insurance policy?
The limit of indemnity is the maximum amount that can be claimed from insurers for the professional’s liability to pay claimant damages. The indemnity limit can operate as ‘aggregate’ or ‘Each & Every claim’:
- If it is ‘aggregate’ the insured has one limit of indemnity to cover all claims in any one period of insurance.
- If it is ‘Each & Every claim’ they have a separate limit for each individual claim that might arise in any one period.
Generally it is possible to secure cover for defence costs payable in addition to the limit of indemnity.
Even under an ‘Each & Every claim’ policy, the limit of indemnity may be restricted for certain categories of claims such as pollution, asbestos or fire safety.
For further information and support, please get in touch.
