Architects

Architects Professional Indemnity – What is it?

Architects owe a duty of care to not only those that have engaged their services for designing and consulting, but also the wider population who use and enjoy their designs.

Architects can face a legal action for the work they carry out for personal injury or property damage resulting from an act, error or omission during the design of a structure.

An architect also has a direct contractual relationship, where the claimant suffers an economic loss because the architect failed to perform the contract according to the appropriate standard of care. Then there is the architect’s legal duty to that person who hired the architect for all the costs related to the design that failed. The architect’s liability for professional indemnity claims situations depends upon performing the services set out in the contract according to the expected and reasonable standard of care. Basically the architect is required to do what a reasonable person in the same profession would do given the same circumstances.

 Then on the other hand, sometimes there are those clients who simply want to avoid paying the architect’s fee and will make allegations simply to force the architect to pay for the cost of construction.

 For these reasons, you need protection against any such claims with a suitable Professional Indemnity Insurance policy.

 

How can you be claimed against?

To bring a claim for a breach of professional duty, the claimant must allege that

  1. the architect had a duty to perform services pursuant to a contract;
  2. there was a breach of the contract by failure to perform the services according to the proper standard of care;
  3. actual damages resulted, and
  4. the client suffered a financial loss as a result of the breach.

 

How can you reduce your exposure?

Aside from accidental errors or omissions, Architects need to make sure that the client understands exactly what services are included in the scope of work and what is not included. The design professional cannot be held liable for failure to perform services that are outside the contractual scope of duties. Your written contract should state in clear terms, the scope of your work, your fees, and your reimbursable costs. This must be done before you commence work. Some clients, especially institutional and governmental ones, will insist on using their own contract forms, so before you sign make sure they include all information necessary to thoroughly describe your services, fees and costs; also be sure that the form does not obligate you to perform tasks beyond the proper scope of your services. Much of what constitutes reasonable care in the exercise of your professional duties should become clear to your clients if you have an open and thorough discussion about the scope of work and the extent of services that you will be providing.

 

Who can help?

An Insurance Broker who specialises in Professional Indemnity can find the right Insurer for you with the most appropriate policy wording. Many insurers though have suffered with claims and have substantially increased their rates. However, there are still a lot of alternative markets that are keen to insure those who practise as Architects.

An insurance broker's role is to act as your representative and work in your interests, seeking the best cover at the best price for you with their skill, market knowledge and experience. Call a good one.

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