Errors and Omissions Exposures in Architecture

While many firms assume that professional insurance is unaffordable or unnecessary, the reality of claim damage can devastate a business. Contrary to popular belief, Professional Liability for Architects is both critical to a company’s success and the coverage is affordable for a range of budgets.

When a company inquires about professional liability coverage, it likely means that they have been scouted to do a high budget, high risk job, or an existing client has voiced some concerns with the work completed. Regardless of the circumstances, this coverage can provide protection against legal fees, negligent acts and omissions in services provided. Bear in mind that these features are often excluded from the standard Commercial General Liability policies, increasing the need for such a specific policy.

Although many firms believe they are at low risk due to their small project intake or their limited assets, professional liability will provide coverage for legal costs in the event of a claim, which is arguably the most valuable feature. This coverage is essential as these claims are so frequent. For example, according to CNA/Schinnerer, 15-21 claims were filed each year per 100 firms between 1994 and 2005.

According to Architectural Record, the insurance company can provide a lawyer to help the architect gather and retain necessary documentation, and avoid taking subsequent actions that could weaken the architect’s defense. This coverage is critical as one claim can result in extensive legal fees that could bankrupt the company in an attempt to simply dismiss the case.

The most common claims result from failure to comply with the client’s expectations. In many cases, architect’s scope of work is underestimated and the schedule of completion might be unrealistic, but that does not prevent the client from filing a claim anyway. These claims are way more abundant and likely as opposed to a catastrophic construction error.

In order to minimize damages, the insurance provider can evaluate risks, provide ongoing consultation, give recommendations for ongoing training, and review client contracts.

At Walker & Associates Insurance, we do our best to improve your risk profile to get the most out of your premium. Our specialized coverages are written specifically for firms like yours to provide a strategic risk management and loss control prevention plan for your business. For more information about our operations, contact our experts today at (888) 920-2139.