As an Architect you sit in an important position on the Professional team. It is long established that an Architect owes a significant duty of care to their clients and for that reason your Architects Professional Indemnity Insurance has been a pot of funds for claimants to attack whenever they are dissatisfied with progress or appearance of the construction. So with the Law and Legal profession targeting your Architects PI Insurance how can you keep your insurance costs low?

Risk Management is key

For a professional practice like Architects, risk management can seem complex and difficult, however Butler Evans like to help our clients with simple advice that tackles the big risks. By doing this the little risks will also be reduced as practice risk management standards improve across the whole business. Architects Professional Indemnity Insurers like firm who evidence good risk management, it is not enough to merely hold RIBA membership..

Insurers expect RIBA members to hold a certain standard of Professional Architectural skill, so here are some other points that Architects can adopt to demonstrate to their Insurers that a low cost Architects Professional Indemnity Insurance is justified.

Documenting the Understanding of Client needs

Foremost in any project is a clear understanding of your clients needs. This includes the appearance, use and cost of buildings as well as where appropriate environmental issues and local community involvement. To assist managing this risk more effectively then Architects should ensure not only developing a good culture of understanding within the firm, but backing this up with high quality documentation of your understanding of your client’s needs, which your client should sign off before any design on your project begins.

Standard Terms of Engagement

Always issue a standard Terms of Engagement letter which outlines clearly what services the Architect provides, Ideally the latest RIBA Standard Appointment Contract. It is advisable to include an aggregate cap of liability within the contract equivalent to your limit of Architects Professional Indemnity Insurance.

Reliance on information provided by others

Architects should be cautious about accepting information provided by others without undertaking their own reasonable examination of the facts. A good example is site condition which could affect the type and structure of foundations.

The degree of care owed by other professional may be lesser than that of the Architects, perhaps because of the scope of services given to that firm by the client. This can lead to a claim against your Architects PI Insurance which cannot be recovered against another professional advisor.

Using Sub-consultants

Where Architects appoint sub-consultants they should always use a letter of engagement which is ‘back-to-back’ with terms of their own client engagement letters. Where the sub-consultant is undertaking a small part of the project work then you may opt to require they hold a lower limit of PI Insurance than yourselves, however always check those sub-consultant firms hold Professional Indemnity Insurance. Architects Professional Indemnity Insurers may exclude claims where you have not made a reasonable attempt to check your sub-consultants PI Insurance is in force.

The most reliable method to check sub-consultants PI Insurance is to request a currently dated letter of confirmation from the sub-consultants Insurance Brokers at the time of entering into a new appointment.

• Appointment of Contractors
• Insurers will want you to confirm that when appointing contractors you have considered the:
• Solvency of the contractor
• Contractors experience in the area of work
• The prices quoted are not unreasonable given the scope of work.
• The evidence of these checks should be kept on your project file.

Your firm is qualified to undertake the project offered

Insurers will look to confirm that you hold a skills & discipline matrix which identifies limitations in the firms ability to undertake unusual or complex work and your firm can identify and decline to quote these projects.

Collateral Warranties

Architects should be careful to remember that whilst linked to the same project, these Deeds of Covenant are separate legal documents. Architects should therefore, ensure they only sign Collateral Warranties and other deeds which:

• Contain identical limitations of liability clauses to those in the main contract
• Do not extend your liability beyond the ‘Exercise of due skill & care in the undertaking of your services’
• Warranties are limited to the use of approved materials and techniques in the construction, you should any express warranty or guarantee of the building’s fitness for an intended purpose.
• The Deed should have a time limitation of not more than 12 years, but preferably 6 years.
• The Deed should not have automatic assignment beyond two times.

Do you already apply these basic Risk Management standards? Then you can already obtain a low cost Architects Professional Indemnity Quotation right now using our simple online application form: