UK Architect Insurance: What Do You Really Need?

Whether you design homes, apartment complexes, restaurants or other buildings, even a skilled, experienced and careful architect can make mistakes. And if something goes wrong during the design or construction process of a building project then the architect can be found liable. For example, a client can sue for their architect for financial loss due to project delay while building regulations are complied with or planning permissions are obtained, or if a building has to be partially demolished.

Both new construction and refurbishments can cost a client a significant amount of money, so an architect can face a significant financial loss if they make a mistake. Architect insurance can help protect you against risks specific to the profession, such as claims of breach of duty or negligent advice made by your clients (professional indemnity) to injury claims made by employees (employers' liability), and more. Here's what you need to get started with understanding what types of insurance you need as an architect in the UK.

What Types of Architect Insurance do I Need?

Professional indemnity insurance is one of the most important types of business insurance for professions that are paid for their professional advice, such as architects. However an architect might also need other common types of insurance such as public liability or employers' liability. Here are descriptions of some of the major types of insurance an architect should consider.

Architects Professional Indemnity Insurance

Professional Indemnity (PI) can protect you and your business financially against claims from clients seeking damages as compensation for losses they've incurred due to your professional advice or service. PI insurance covers legal defence costs (e.g., professional legal fees and expenses incurred in defending or appealing a claim) and also compensation payments you're found liable to pay through the final decision of a court or arbitration or settlement.

PI is a critical component of cover for architects and any profession where you're paid for your advice. In fact, the Architecture Registration Board recommends that architects have a minimum PI coverage limit of £250,000 for each and every claim. Here are some examples of situations that can be covered by a PI insurance policy for an architect:

Examples

  • Errors in drawings or plans
  • Failing to obtain necessary planning permissions causing delays
  • Making a decision without consulting the client
  • Using different materials than those agreed
  • Giving poor advice
  • Failing to anticipate a potential issue
  • Failing to design within a project's budget
  • Personal injury

Claims-Made Cover

Professional indemnity insurance for architects is normally sold on a claims-made basis, which means you're only covered for claims made while your insurance policy is still active, not for claims made after your policy has expired or been cancelled. Why? A client might not discover an error you made until years after a project was completed.

Professional Indemnity Insurance: You need to be insured both at the time of the alleged incident (when you did the work) and also when your client makes a claim against you.

If you let your policy expire or cancel it, you won't be covered anymore—even if the work you did occurred while your policy was active. For example, if you have professional indemnity insurance in 2020 but let it expire at the end of the year, then you won't be covered in 2021 if a client sues you for negligent advice you gave whilst you were covered in 2020.

Retroactive Dates

To enable policy holders to switch insurers without a gap in cover, a professional indemnity insurance policy will typically have a "retroactive date" that essentially backdates your cover to the date you first had uninterrupted cover even if with another insurer. If you are switching to a new insurer and have no gap in cover, then your retroactive date will be before the start date of your new policy.

Run-Off Cover

If you decide to retire or take a break, an architect still needs "run-off" professional indemnity insurance for six years. Why? A client can sue an architect for negligence up to six years after the event (or five years if you practice in Scotland), or within three years of negligence being noticed.

Public Liability Insurance for Architects

Public Liability insurance protects an architect against claims of property damage or bodily injury by a client or other member of the public—for example, slips and falls in your place of business.

Public liability insurance provides access to legal experts to help you defend a claim, justified or not, as well as covering legal costs and compensation payments if you're sued and found liable. It's common to find limits of £1 million, £2 million, £5 million or £10 million in the UK marketplace for public liability insurance.

  • Bodily Injury Example: A client trips on a computer cable on the floor of your office. They fall and break their arm, suing for lost wages when they are unable to work.

Employers' Liability Insurance

Employers' Liability insurance (EL) is compulsory for businesses that have any employees, such as office managers, assistants or other architects. EL insurance covers legal costs and compensation payments you're found liable for if an employee becomes ill or is injured at work and sues as a result.

  • Employers' Liability Example: An employee is injured while checking progress at a work site. They sue you as a result.

Business Equipment Insurance

Business Equipment Cover can help protect your computers, 3D scanners and other specialist tools against loss or damage. While exact perils covered will depend on the terms of a policy, it's not uncommon for theft, accidental damage, fire, flood and storms to be included. If you take any equipment with you when you work away from your main business premises, for example to client sites, then you'll need extra cover to accommodate this added risk.

  • Tools/Equipment Cover Example: A fire in your place of business damages all of your equipment. You can claim for their value under your equipment insurance.

Personal Accident Insurance

Personal Accident insurance can provide a financial benefit to you if a workplace injury prevents you from working—for example, if you're injured at a work site and are incapacitated as a result. Personal accident cover is a "benefit" (which means the premium is not a tax deductible business expense) and is usually paid as a weekly payout for a temporary injury (e.g., broken leg) or a lump sum payout for a permanent disability (e.g., loss of a limb). In essence, personal accident cover is meant to help you pay for your living expenses while you're unable to earn money as usual.

  • Personal Accident Example: You trip and fall at work at a client's property, causing you to throw out your back. You're unable to work for a few weeks while you recover. You claim for the weekly benefit during this period.

Commercial Vehicle

Commercial Vehicle insurance is necessary for company-owned cars. And if you use your personal car to carry tools or equipment then you might need commercial cover. However if you simply drive your personal car between client sites then you might only need to declare business use on your regular car insurance. If you're unsure it's best to check with your insurance company or a specialist broker to explain how you use your vehicle to determine which type of vehicle insurance you need.

  • Commercial Vehicle Example: While an employee is driving your company-owned car to a client's project, they have an at-fault accident at an intersection. There's damage to both vehicles involved in the accident. A comprehensive commercial car insurance plan would cover the resulting damage.

Depending on your specific needs, there could be other types of business insurance that you might need for your architecture business (e.g., directors and officers, business interruption, legal expenses, etc.). Talk to a specialist insurer or broker if you are unsure of the business insurance coverage you need.

Do Architects Need Insurance?

Yes, architects need business insurance. Whether you operate as a sole trader or in a partnership or company, your professional work as an architect must be covered by a professional indemnity insurance policy—this holds if you are an owner or employee. You’ll either need your own insurance policy or to be covered under your employer's policy. If you're an employee or you consult for an agency, be sure you're covered by getting confirmation in writing.

The specific types of insurance you need and how much cover you need will vary depending on factors like the size of your contracts and whether you're an employee, you're self employed or you own your own firm. Architecture work is high stakes, with professional errors potentially costing clients thousands or even millions of pounds to remedy, so getting the right cover is critical. The right insurance can protect you and your business financially against claims that could otherwise have a devastating effect.

Even if a claim is unfounded, you will still need to pay to defend it—and legal expenses can easily run into the thousands of pounds to defend an unjustified claim. And an architect can be sued even if they had limited oversight during the construction phase of a project or the project developer overruled the architect's plans.

How Much is Public Liability Insurance for an Architect?

The cost of public liability insurance for an architect starts from around £300 a year, but prices can easily rise to £1,000 or more depending on your turnover, contract size, types of work you do, business structure (e.g., sole trader, partnership or limited company), amount of cover you need, etc.

If you go for a higher coverage limit on your public liability insurance your premium will go up, but not by much—the first £1 million of cover is the most expensive, with each additional £1 million of cover typically costing less than the previous £1 million. Here are some of the factors that will determine the cost of an architect's public liability insurance:

  • Turnover
  • Size of contracts
  • Business structure (sole trader, partnership, limited company)
  • Involvement in project management
  • Types of structures (e.g., housing, public sector, rail, utilities, amusement rides, swimming pools, hospitals, etc.)
  • Types of work (e.g., alterations, new builds, landscaping, planning supervision, draughting services, etc.)
  • If you work with Asbestos

Ultimately, the total cost of business insurance for an architect will also depend on which additional coverages you need. For example, architecture firms with employees will pay employers' liability insurance premiums. And many architects will also pay public liability insurance premiums since they have in-person interactions with clients.

FAQs

Yes, architects need insurance. While they may want any number of different types of cover, professional indemnity insurance is probably the most critical as its required by the Architecture Registration Board (with £250k minimum cover). Public liability insurance is also critical for architects having any in-person interactions with their clients or other members of the public. And employers' Liability insurance would be required by law for an architecture practice with any employees. These are just a few of the types of business insurance an architect might need.

Yes, architecture firms of all sizes face risk and need insurance, from self-employed (sole trader) architects to larger limited architecture companies. For instance, whether you're a sole trader or a larger company and architect needs professional indemnity insurance, plus they may need other types of cover as well. Learn more here.

Yes, professional indemnity insurance is arguably the most important type of cover for an architect. It covers defence costs and compensation payments for negligent advice or service that you provide as an architect.

Professional indemnity insurance in the UK covers architects for legal defence costs and compensation payments arising from clients who claim you gave poor advice that resulted in a financial loss (e.g., the cost of project delays or extra building costs whilst an error is remedied).

Any business, including architects, that interacts with members of the public—from clients to vendors—can be at risk of a bodily injury or property damage claims and should have public liability insurance.

Any architect needs run-off insurance to protect against professional liability claims that occur after a policy has expired or been cancelled.

An architect who stops practicing should have run-off professional indemnity insurance for 6 years in the UK (5 in Scotland).

Architects needs professional indemnity insurance to protect against claims from clients who claim that the architect's advice or service resulted in a financial loss for the client. For example, a client could claim that an error in the drawings caused works to be partially torn down at great expense.

Architect Employment and Earnings Statistics

According to the latest Annual Survey of Hours and Earnings (ASHE), architects earn an average of £46,116 a year in the UK, but pay depends on your experience level, the type of work you do, the type of business you run, how much you work and where you live. Here are some statistics on how much architects earn a year across the UK:

Architect Employment Statistics UK
Number of Architecture Jobs35,000
UK Average pay - Architects£46,116
UK Average pay - Draughtspersons£31,606

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