What is architect insurance?
Architect insurance is a specialized professional liability insurance policy that provides financial coverage for architects against lawsuits resulting from errors and omissions, negligence, and failure to deliver service. In addition, insurance packages for architects can extend coverage to protect from other third-party risks such as property damage and bodily injury.
What does it cover?
A comprehensive architect insurance policy may include several types of coverages, including:
- Professional Liability Insurance: From the initial consultation to construction administration, architects could be held liable for mistakes that may happen at any phase of the project. Professional liability insurance, also known as errors and omissions (E&O) insurance, is a critical coverage for architects. It protects them against financial losses due to negligence, errors, or failure to deliver a service as promised.
Some common risks that architects face include:
- Design or planning errors
- Missing project deadline
- Mismanagement of budgets
- Negligent contract bids
- Commercial General Liability (CGL) Insurance: Also referred to as slip-and-fall insurance, CGL is an all-risks type of policy that covers you from third-party bodily injuries or property damage claims. For instance, if a client or visitor to your office trips, falls, is hurt, and requires medical attention, they may sue you for damages. CGL provides you with coverage to defend yourself in court, and it pays for your injured customer’s medical expenses.
- Legal Expense Insurance: In the event you are sued by a client or former client, legal expense coverage provides access to legal advice with an experienced lawyer as well as the cost to retain a lawyer to defend you in court.
- Cyber Liability Insurance: Cyber liability insurance protects businesses from internet-based risks and risks related to your information technology infrastructure, and information privacy and governance. If your organization has a data breach and your clients’ confidential information is leaked, exposed, or stolen, you may be subject to an expensive lawsuit. Cyber liability covers the cost to repair your computing systems, any losses you suffer because of a computing systems outage, legal advice, notifying your customers of the incident, and providing them with credit monitoring.
How much does it cost?
Most architects typically have up to $2 million worth of coverage for both commercial general liability and professional liability insurance. A policy with those levels of coverage may start at around $1,500 per year, but the premium you pay will depend on the nature of your business.
Some of the price factors include:
- Years of trade experience
- Designation (e.g (R.A., MRAIC, FRAIC, OAQ, MIRAC, FIRAC)
- Annual and projected revenue
- Different types of services provided
- Industries served (high or low risk)
- Number of employees
- Degree of involvement with Design-Build projects
Do architects need insurance?
Yes. Professional liability coverage is essential for architects and may be mandatory for the profession in some provinces. It includes protection from claims such as failing to deliver a service or giving incorrect advice. The types of architects requiring insurance includes:
- Residential and commercial architects
- Restoration and landscape architects and engineers
- Architectural designers
- Architectural engineers
Common claims scenarios
Frequently asked questions