Architect Liability Insurance
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Professional Liability Insurance (aka E&O insurance) for Architect
Architects are experts when it comes designing buildings. Your expertise is essential not just to the planning stages, as builders, engineers and other professionals may seek your advice throughout a project’s lifecycle. Your clients trust you to deliver high-quality designs and plans for a variety of spaces from new homes and hotels to shopping mall and multi-story blocks. The sky is the limit!
But with new designs and plans comes an element of risk for things to not go according to plan. Mistakes and accidents can happen, even to the most practised and careful architect. If this happens, you could be accountable for damages, even in cases where the claim is baseless.
Unforeseen events can have a devastating impact on an architect’s professional reputation and finances. Professional Liability insurance can help protect your career and savings from the risks commonly faced by architects.
Professional Liability insurance for architects (also referred to as E&O insurance) covers claims made by a third-party alleging that they suffered financial harm due to the advice or services your business provided. This type of insurance typically covers your legal expenses, including settlements or judgements, related to the claim.
Your Professional Liability insurance coverage will often extend beyond a project’s completion, to cover issues that may appear after your work is finished.
A&E insurance policy provides the following standard coverages:
- Architects and Engineers Professional Liability
- Architects, Engineers and Contractors Pollution Liability
- Technology Based Services
- Technology Products
- Computer Network Security and Privacy Liability
- Multimedia and Advertising
In addition to standard coverages, architects often need the following coverage features:
- Technology risk coverage for:
- electronic transfer of data
- copyright infringement
- web-hosting functions
- privacy liability
- ADA/FHA/OSHA regulatory actions reimbursement extension
- Defendants’ reimbursement extension
- Disciplinary proceedings reimbursement extension
- Reputation management reimbursement extension
- Broad definition of insured – includes insured’s participation in joint ventures
- Automatic 60-day coverage for acquired entities
- Blanket waiver of subrogation provision for clients of the insured as required by contract
- Punitive damages extension – where insurable by law
- Mediation deductible credit
Did you Know?
Some of your clients may require that you and your subcontractors carry professional liability insurance.
Architect Liability Insurance Covers a Broad Range of Professions
- Architecture
- Agency construction managers
- Project managers
- Landscape Architecture Inclusive of Irrigation Services
- Interior designers
Why Do Architects Need Professional Liability Insurance?
The role of an architect is one which involves direction and creativity from the drafting table to the construction site, and it’s not a career that comes without risks. A simple miscommunication or mistake could result in a costly claim, something which you could live without.
Even the most experienced architects are exposed to the risk of mistakes happening, and even if a mistake wasn’t made, an acquisition of negligence could result in a costly lawsuit just in defence costs alone. This could be enough to cause extensive financial damage, enough to potentially put you out of business.
This is where Professional Liability insurance becomes vital to protecting your business and can provide coverage in the event if you are sued or a claim is made against you, covering your associated legal fees.
Not only should having the right insurance be part of your business plan, but it may also be a contractual requirement to work on certain projects that you have a Professional Liability policy in place. Your client wants to make sure that all risks for errors are covered.
FAQ
What does architects insurance cover?
Professional Liability or Errors and Omissions insurance for architects covers a range of liability claims, including:
- Errors and Mistakes
- Omissions
- Undelivered services
- Missed deadlines
- Negligence
- Breach of contract
This form of coverage is an important way for architects to help protect themselves professionally. Professional Liability/Errors and Omissions insurance pays for the legal costs associated with an above claim, up to the limits of liability, so you’re not left to pay them from your own financial accounts.
Why do architect firms need business insurance?
Architecture firms often take out different types of business insurance, including Professional Liability (also known as Errors and Omissions) insurance, to help protect themselves and their employees.
Architects regularly use their expert knowledge and skill to give clients advice that is used to make important decisions. If this advice results in a financial loss for a client, the firm itself could be found responsible. A firm may decide that Professional Liability insurance is necessary to cover their architects as they carry out work for the firm.
Architecture firms may also take out other forms of business insurance to help shield them against common risks to their business. This may include Workers’ Compensation, General Liability, or a Business Owner’s Policy. These coverages can protect against events such as workplace injuries, damage to client property, and business interruption, along with many others.
How much does architects insurance cost?
Every architect and architecture firm are different. What you could pay for Professional Liability/Errors and Omissions insurance will vary based on factors, such as:
- Your location
- Size of business
- Amount of coverage needed
- Your risk management procedures
- Claims history
The most reliable way to learn how much a Professional Liability/Errors and Omissions insurance policy that meets your needs will cost is to compare quotes from multiple insurers.
What type of business insurance do architects need?
Professional Liability or Errors and Omissions insurance is just one type of policy that architects commonly consider. Other forms of coverage may be necessary to help fully shield you from on-the-job risks that architects often face.
Other types of insurance that architects consider include:
General Liability – This type of policy can protect you against third-party claims regarding injury or damage to their property. Your policy will cover the legal expenses and cost to replace or remedy the situation up to the limits of liability in these instances.
Business Owner’s Policy – This is a combination of policies, that help protect small businesses from costly interruptions to service. A BOP commonly combines General Liability insurance and business personal property coverage into one convenient policy.
Workers’ Compensation – These policies shield your business against medical expenses and lawsuits resulting from employee workplace injuries and serious illnesses. Workers’ Compensation insurance typically also pays lost wages as a result of the employee’s work injuries.
