PI Insurance 

• Professional Indemnity Insurance is a compulsory requirement of the Architects Registration Board (ARB).
  
• It is essentially designed to cover the costs of claims and defence costs against you for mistakes you make. 

• The ARB guideline is that architects have at least an indemnity of £250,000.

• Whilst an architect can easily arrange cover for office contents, motor insurance etc., a claim against you for negligence can result in a huge settlement and incur you in substantial legal costs which far exceed the fees you earn.  Straightforward contracts with apparent low risk exposures can actually expose you to substantial financial losses. 

For example the design of a shopping centre car park ultimately led to huge third party claims as a result of problems with the car park leading to a reduction in the number of shoppers. 

• Selecting an adequate level of coverage is not therefore straightforward and is a balance of exposure versus cost. 

• RIBA Insurance Agency (RIBAIA) regularly offer Risk Management advice through e-newsletters and via our website.  One particular area that RIBAIA recommends is to review contracts carefully, seek advice and always look to incorporate a liability cap.  Although you should remember that limiting your liability under contract would not apply to your liability to third parties where your liability is unlimited.