Professional Indemnity Insurance for Architects and Surveyors

Find and Compare Professional Indemnity Insurance Policies for Architects and Surveyors

Professional indemnity insurance offers protection for professionals who provide advice or a service to their customers. If for some reason a client believes that you acted in a negligent manner, this type of cover will pay for the costs and expenses involved in your legal defence, as well as provide cover for any damages or compensation you are legally required to pay.

If you make a mistake or commit an omission, which results in third party dealing with loss or damages, that third party is well within their rights to launch legal action against you. These claims can be costly, both in sense of time and money and cause enormous damage to the reputation and standing of your business.

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This is why professional indemnity insurance must be considered by a range of professionals. It offers cover for you and your business against professional conduct claims, offering the confidence and peace of mind you need to survive any legal action.

Is professional indemnity applicable to architects and surveyors?

If your occupation requires you to provide advice or services to individuals or businesses, you’re at risk of making a mistake that causes your client to lose money. If a third party were to make a claim of negligence against you, how would you be able to afford your legal defence or cover any compensation costs you are required to pay?

As architects and surveyors offer specialised knowledge and expertise to their clients, professional indemnity insurance is a vital requirement for their profession. No matter how much of an expert you are and no matter how perfect your attention to detail may be, mistakes do happen and the last thing you want is to end up caught short. This type of cover offers a safety net for your business, providing protection against a wide variety of claims that can be brought against you.

Having professional indemnity cover in place allows you to go about your day-to-day business with confidence, allowing you to feel safe in the knowledge that you will be covered if something goes wrong.

Professional Indemnity Insurance

When is the best time for Architects and Surveyors to get professional indemnity insurance?

The sooner the better. Both professions require you to provide specialised advice to clients for a fee, leaving you open to a wide range of possible claims that could be made against you.

In fact, depending on where you live, it may be compulsory to have a professional indemnity policy in place. For example, a minimum amount of $1 million of professional indemnity cover is required for practising architects in Western Australia.

If you’re considering taking out cover, take the time to assess the risks you and your business are regularly exposed to. This will help you find the right level of cover for your needs.

How does a professional indemnity insurance policy protect someone?

Professional indemnity insurance is designed to cover financial loss resulting from an act, error or omission by you or someone else working for your company. This could mean negligent advice, a faulty design or failure to advise and the cover will ensure that you are able to carry on with your business in the event of a claim being made against you.

While the level and amount of cover available differs from one professional indemnity policy to the next, this type of insurance will typically cover:

  • Acts of negligence while a service is being provided
  • Accidental infringements of intellectual property rights
  • Unintentional breaches of confidence or misuse of information
  • The loss of or damage to a client’s important documents
  • Accusations of libel or slander against you or your business
  • Dishonesty of employees.

A professional indemnity policy should cover your business and any partner, director or employee of the business. However, remember that cover differs between policies and providers, so make sure to compare your available options and speak to an insurance consultant to get specialised advice tailored to your professional situation.

How much cover is needed?

It’s impossible to provide a stock answer to this question, as the exact amount of cover needed will differ from one business to the next. In order to determine the level of cover you require, it’s important to take a number of factors into account.

First of all, consider the size of your largest contract or project, then assess exactly how many third parties are relying on your advice. Consider the cost involved in defending any claims made against you, as protracted legal battles certainly do not come cheap. Finally, remember that professional indemnity policies are written on a ‘claims made’ basis, which means you’ll have to take inflation into account when considering claims for past damages.

The minimum level of cover available on most policies is $1 million, with most insurers also stipulating an upper limit of $20 million.

How to choose a professional indemnity insurance for Architects and Surveyors?

There are a number of factors you should take into consideration when looking for professional indemnity insurance for architects and surveyors.

  • Approach your current insurer. If you already have other forms of insurance cover with a particular provider, check if you are eligible to receive a discount, as some providers are willing to discount a policy option in order to keep you using their services. Also remember that some insurers will offer discounts if you’re a member of certain trade organisations.
  • Find an insurer who specialises in your profession. Some insurers specify in providing insurance cover for certain professions, so you should try to hunt down an insurer who concentrates on insurance solutions for architects and surveyors. A specialist insurer can offer in-depth knowledge of the common issues and risks associated with your profession.
  • Know what you need cover for. Before you start comparing policies, take the time to assess the various risks posed to you and your business. This will help you find a policy that offers the right level of cover for you, without forcing you to pay for cover features you don’t need.
  • Get plenty of quotes. Don’t simply apply for the first professional indemnity insurance policy you find. Instead, source multiple quotes from a number of insurers and compare them against one another.
  • Don’t make a decision based purely on cost. While cost is a major consideration in any business decision, don’t just select a professional indemnity policy based on the cost of premiums. Read each policy document carefully so you can figure out exactly what each policy does and doesn’t cover. An in-depth comparison will ensure you end up with the right policy for you in the long run.
  • Do as much research as you can. Investigate multiple insurance companies and look for a trusted and respected insurer. Ask industry colleagues for their recommendations for who they think is most suitable insurer for your industry, plus check Internet forums and online reviews for customer feedback. It always pays to use a comparison tools when researching policies.

How are Professional Indemnity Insurance Claims Made?

Even if it seems a little far-fetched to imagine one of your clients initiating legal action against you, it can happen at any time, sometimes years after you’ve completed the work. If you are ever made aware of a situation that may result in a claim of any sort being made against you, notify your insurer immediately. If a client’s letter or phone call demands compensation or threatens legal action, it’s essential that you let your insurance company know as soon as possible.

Once notified, your insurance company will be able to guide you through the claims process, leaving you free to operate as though it's still business as usual. Pass on all documentation you receive about the claim, to your insurer. Most companies have a claim form accessible from their website.

It’s important to note that not notifying your provider can result in your insurer rejecting your claim once your policy has expired.

Frequently asked questions about professional indemnity insurance

Q. What does a professional indemnity insurance policy cover?

  • A. Professional indemnity insurance protects you and your business against claims of negligence. This can include acts of negligence while a service is being provided, accidental infringement of intellectual property rights, unintentional breach of confidence or misuse of information and the loss of or damage to a client’s important documents. If you provide advice or a service to your customers, this type of policy provides cover for the legal costs of defending any claim, as well as for any damages or compensation you are legally required to pay.

Q. What does an insurer mean when it says my professional indemnity policy is offered on a ‘claims made’ basis?

  • A. This means that, in order to be protected, your policy will need to be in effect when a claim is made against you. On the other hand, other forms of insurance provide cover if an event occurs during the period of insurance—these policies are provided on an ‘occurrence’ basis.

Q. How do I compare professional indemnity policies?

  • A. Take the time to determine what risks your business is exposed to and how much cover you need. Research a number of insurers, seek advice from other people in your profession, obtain multiple quotes and take advantage of comparison tools. If you need expert advice when shopping for cover, speak to an insurance consultant.

Professional indemnity insurance is designed to protect your business from any claims made against you because of your negligence. It can cover your financial needs when such claims arise, as well as take the stress out of dealing with these sorts of legal situations. For architects and surveyors, professional indemnity cover can be a hugely beneficial form of protection.

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William Eve

Will is a personal finance writer for specialising in content on insurance. While he cannot give personal advice to clients, Will enjoys explaining the intricacies of different types of protective cover to help individuals and businesses find affordable cover that won't leave them underinsured.

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