How Much PI Cover Does an Architects’ Practice Need?
This is the architects’ edition of our limit-sizing series. It is written for practice principals and directors deciding what limit to buy at renewal — not whether to buy PI at all (for that, start with our full architects’ PI guide).
The regulatory starting point: adequate and appropriate
Architects registered with the Architects Registration Board are required, under ARB’s Standard 8, to have adequate and appropriate professional indemnity cover in place. Note what that standard does and does not do. It obliges you to hold cover, and it obliges the cover to be adequate and appropriate to your practice — but it does not hand you a number. The judgement about what is adequate for your particular mix of projects, clients and appointments sits with you, and you should be able to show your reasoning if asked.
If your practice is a RIBA chartered practice, RIBA also sets expectations about the PI cover chartered practices maintain. Those expectations are set out in RIBA’s current chartered practice criteria, and you should check the current documents directly rather than rely on a remembered figure — requirements of this kind are reviewed and do change.
The practical point is the same one we make to law firms and surveyors: regulatory and institutional baselines are a floor, not an answer. Most established practices we deal with buy above any baseline, because the real drivers of the limit sit elsewhere.
Driver one: what your contracts require
Pull out your current appointments, framework agreements and any collateral warranties you have given. Many commercial clients, developers, funders and public-sector frameworks specify a minimum PI limit as a condition of appointment, and they usually also specify the basis of that cover and how long it must be maintained after practical completion. The highest limit any live contract requires of you is your contractual floor. If you are carrying cover below what an appointment obliges you to hold, you are in breach of that appointment whether or not a claim ever arrives.
Collateral warranties deserve particular attention. Each warranty extends a duty of care to a party you did not originally contract with — a funder, a purchaser, a tenant — and typically obliges you to maintain PI cover at a stated level for a stated number of years. Warranties given years ago on completed projects still bind you today. A limit-sizing exercise that ignores historic warranties is incomplete, because your PI policy responds on a claims-made basis: it is the policy in force when the claim is made, not the one in force when the work was done, that must carry the limit.
Driver two: the worst credible claim
The second exercise is to think about severity honestly. For each material strand of your current and recent workload, ask: if this project went badly wrong because of our design, specification, inspection or contract administration, what is the largest claim it could credibly produce?
The answer is rarely your fee. Claims against architects are framed by the cost of remedying the problem and the losses that flow from it — remedial works, delay, loss of use — which are anchored to the value and nature of the project, not to what you were paid. A modest fee on a substantial building can still carry a substantial exposure.
To be clear about method: this is an illustrative framing, not a prediction. The aim is to identify the upper bound of credible single-claim exposure across the work your practice actually does, and to sense-check your limit against it.
Policy mechanics that change the maths
Any-one-claim versus aggregate. A limit written on an any-one-claim basis reinstates in full for each separate claim in the policy year. An aggregate limit is a single pot: every claim notified in the year erodes it, and a bad year can exhaust it. Two policies with the same headline figure are not equivalent if one is any-one-claim and the other is aggregate. Check which basis your policy is written on, and which basis your appointments require — many contracts specify any-one-claim.
Defence costs inside or outside the limit. If defence costs are payable in addition to the limit, the full limit remains available for the claim itself. If they are inside the limit, every pound spent on lawyers and experts erodes what is left to pay the claim — and construction disputes are expert-heavy and slow, so defence costs can be significant long before liability is resolved. A costs-inclusive limit buys you less than the same figure written costs-in-addition, and you should size accordingly.
When excess layers are the answer
If your contractual floor or worst-credible-claim analysis points to a limit above what your primary insurer will offer — or above what it will offer at a sensible price — the usual answer is not to change insurer but to add an excess layer: a second policy that sits above the primary and responds once the primary limit is exhausted. Layering is the standard way practices meet a one-off warranty or framework requirement without re-pricing their whole programme, and it is often the most efficient way to buy the top portion of a larger limit. We cover the mechanics in our excess layer guide.
Run-off: the limit question does not end when you do
Because PI is claims-made, closing or retiring does not end your exposure — claims can arrive years after the last drawing left the office. Run-off cover keeps a policy in force to respond to claims made after you cease practice, and the limit you carry into run-off deserves the same analysis as a live renewal: your historic warranties and completed projects define the exposure, and ARB’s expectation of adequate and appropriate cover extends to how you wind down. Plan run-off early, ideally several renewals before you intend to stop.
How Apex approaches it
At renewal we review your appointments and warranties for required limits, work through the severity of your current project list with you, and price the options — including layered structures — so you can see what each step up in limit actually costs before you decide. The decision is yours; our job is to make it an informed one, evidenced well enough to satisfy ARB’s adequate-and-appropriate test.
Frequently asked questions
Does ARB tell me what limit to buy?
No. ARB’s Standard 8 requires cover that is adequate and appropriate for your practice, but it does not prescribe a figure for every firm — the judgement is yours to make and, if necessary, to justify. Check ARB’s current guidance for the detail of what it expects, and treat any stated baseline as a floor rather than a recommendation.
A collateral warranty asks for a higher limit than I carry. What are my options?
Three, broadly: negotiate the warranty’s insurance clause down (sometimes possible, often not), increase your whole programme to the required limit, or add an excess layer that brings your total limit up to the requirement. The layered route is frequently the most economical, and it is one of the most common reasons architects come to us mid-term.
Should I size the limit to my fee income?
Fee income is a useful proxy for the scale of a practice, but claims are driven by project values and consequences, not fees. A small practice doing high-value residential or structural alteration work can face larger credible claims than a bigger practice doing lower-stakes work. Size to your contracts and your worst credible claim, then use income as a cross-check rather than the starting point.
Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority (FRN 724952). This article is general information, not advice on your specific circumstances.