Architect Liability Insurance
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Professional Liability Insurance (aka E&O insurance) for Architect
As an architect your profession is held in high regard and you are considered an expert in your field when it comes to all things architectural. Creating designs that transform spaces from new homes to hotels, shopping malls and multi-story blocks, the sky is the limit! Your clients trust that you will deliver their designs and plans without fail. But with new designs and plans comes an element of risk for things to not go according to plan.
When something goes wrong and a client becomes unsatisfied with your work, you have the potential of becoming accountable for damages, regardless if the claim is actual or alleged.
When mistakes happen, they can have a devastating impact on your finances and your reputation. Professional Liability insurance is there to provide protection from the risks you face as an engineering professional.
Professional Liability insurance comes into play when a third-party makes a claim against you for financial harm caused by advice or services your business has provided and can provide cover for your defence expenses, settlements and judged related to the claim.
It is important to extend your Professional Liability insurance long after the project has been completed as this is when the cracks can appear, and problems start to arise.
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.
Architecture Covers a Broad Range of Professions
- 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.
What does architects insurance cover?
Professional Liability or Errors and Omissions insurance for architects covers a range of liability claims, including:
- Errors and Mistakes
- Undelivered services
- Missed deadlines
- 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 may not be the only business insurance that architects consider. Depending on your business structure and needs, you may also take other forms of coverage to help fully shield you from on-the-job risks.
Other types of insurance that architects consider include:
- General Liability – This type of policy can protect you against any claim by an outside party regarding injury or damage to their property. In these instances, your policy will cover your legal expenses as well as your cost to replace or remedy the situation up to the limits of liability.
- Business Owner’s Policy – This is a combination of policies, combining covers such as General Liability insurance and business personal property coverage, to help protect small businesses from costly interruptions to service.
- Workers’ Compensation – These policies protect you against medical expenses and lawsuits that can arise from employee workplace injuries and illnesses. It could also pay lost wages as a result of the work injuries that an employee sustains.