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Insurance explained
PI insurance for a mid-sized architecture practice is cover for claims that the practice's design, specification or advice was negligent and caused a client or third party loss. It matters because larger projects bring longer liability tails, contractual demands and fire safety scrutiny.
Part of: Professional indemnity insurance
In short
Architecture practices with roughly 10 to 100 staff usually work on larger residential, commercial and public projects, often under design and build, with collateral warranties and novation. ARB guidance says no architect should accept cover below £250,000 on an each and every claim basis, though contracts commonly require much more. Fire safety and cladding cover is often restricted or aggregated. Section 135 of the Building Safety Act 2022 extended limitation for some Defective Premises Act claims to 15 years, or 30 years for earlier work. Check limits, aggregates, exclusions and contract terms together.
Professional indemnity (PI) insurance pays defence costs and damages when a practice is alleged to have breached its professional duty, subject to the policy terms. For architects that usually means design errors, specification mistakes, poor contract administration, or failure to spot that work did not meet the design or regulations.
PI is written on a claims-made basis. The ARB's PII guidance gives the example of a claim made in 2023 about work done in 2019 being handled under the 2023 policy. A practice therefore carries its entire past portfolio into every renewal. Our architects PI guide covers the basics for practices of all sizes; this page focuses on what changes as a practice grows.
The Architects Registration Board updated its PII guidance in November 2022. It says no architect should accept a minimum level of cover below £250,000, held on an each and every claim basis, and that the right level should reflect the scale and nature of the work. Fire safety, cladding, asbestos and pollution cover may be held on an aggregate basis, and fire safety and cladding cover may be limited to direct losses, but ARB says such restrictions should be accepted only where there is no alternative after reasonable efforts. Work subject to a complete exclusion is not acceptable. ARB also expects at least six years' run-off cover after ceasing practice, or five in Scotland.
RIBA describes PII as both a statutory and professional obligation and publishes its own guide to PII for members. RIBA members and Chartered Practices should check RIBA's current requirements alongside ARB's. Our comparison of ARB, RIBA and CIAT requirements sets them side by side.
Since Grenfell, many insurers restrict cover for fire safety and external wall work through exclusions, sub-limits or aggregate caps. See cladding and fire safety exclusions in PI.
Section 135 inserted section 4B into the Limitation Act 1980. Claims under section 1 or 2A of the Defective Premises Act 1972 now have a 15-year limitation period, and claims under section 1 that accrued before 28 June 2022 have 30 years, with retrospective effect. See the section 135 limitation extension and principal designer exposure.
When a practice is novated from employer to contractor, its duties, client and potential claimants change mid-project. Insurers look closely at appointment terms. See design and build PI risk and novation and PI.
Funders, purchasers and tenants commonly ask for warranties, often signed as deeds with a 12-year limitation period. Each warranty can add a potential claimant. See collateral warranties and PI.
A net contribution clause limits the practice's liability to its fair share of a loss, rather than the whole loss when other parties cannot pay. Insurers generally prefer appointments that include one. See net contribution clauses explained.
| Usually covered | Commonly excluded, restricted or elsewhere |
|---|---|
| Negligent design, specification and advice | Fire safety and cladding, often aggregated, sub-limited or excluded |
| Defence costs, usually with insurer consent | Liability accepted under contract beyond normal professional duty |
| Claims under collateral warranties within normal duty | Fitness for purpose obligations |
| Breach of confidentiality and loss of documents, if included | Injury and property damage, under public and employers' liability |
| Claims from novated or design and build appointments, if declared | Known circumstances not notified to a previous insurer |
All of this is subject to the policy terms, which vary widely between insurers.
Clients and contractors usually set PI limits in the appointment, and mid-sized practices often face requirements well above the ARB minimum. Many practices buy a primary policy and then excess layers to reach the limit their largest contracts require; see layered programmes for architects and engineers. Remember that a fire safety aggregate is shared by every claim in that category during the year, so a high each and every claim headline limit can sit alongside a much lower fire safety aggregate. Our guide to aggregate and each and every claim limits explains the mechanics.
Underwriters typically look at fee income split by work type, residential and higher-risk building exposure, external wall and fire strategy involvement, use of novation and design and build, contract terms, quality management, claims history and how the practice checks subconsultants. Under section 3 of the Insurance Act 2015, the practice must give a fair presentation of the risk. See how much PI cover a practice needs.
These examples are illustrative and not based on any client.
A common misunderstanding is that a high headline limit means the practice is fully protected. The limit only helps if the claim falls within cover. A fire safety exclusion, a contractual liability exclusion or an aggregate already eroded by earlier claims can leave a practice exposed despite a large limit.
A second misunderstanding is that growth only changes the premium. As a practice expands it often takes on new sectors, overseas projects, subconsultants and more senior staff who bring prior liabilities. Insurers want to know about each change, and a merger or acquisition raises questions about which policy covers each firm's past work; see PI on practice merger or sale. Subconsultants should hold their own PI at suitable limits, and appointments should be checked so the practice does not take on liability for their design without recourse.
Finally, practices sometimes treat notification as a formality. Most claims-made policies require prompt notice of circumstances that might give rise to a claim, and late notice can lead to disputes between insurers at renewal. A clear internal process for reporting concerns to the practice principal and the broker is part of managing PI, not just buying it. Our PI claims handbook for architects explains the steps.
Our annual renewal guide has a timetable. Apex arranges PI for architecture practices; a broker reads every enquiry.
ARB's PII guidance says no architect should accept a minimum level of cover below £250,000, on an each and every claim basis, with the right level reflecting the scale and nature of their work. Client contracts and RIBA requirements may call for more, so check appointments before renewing.
Many policies restrict fire safety and cladding cover. ARB guidance accepts aggregate cover and cover limited to direct losses for these risks where there is no alternative after reasonable efforts, but says work subject to a complete insurance exclusion is not acceptable.
Section 135 of the Building Safety Act 2022 inserted section 4B into the Limitation Act 1980. Claims under sections 1 and 2A of the Defective Premises Act 1972 have 15 years, and section 1 claims that accrued before 28 June 2022 have 30 years, with retrospective effect.
Novation moves an architect's appointment from the employer to the design and build contractor mid-project. The practice's duties and potential claimants can change, and contractors may seek wider obligations. Insurers usually want to know how much work is novated and on what terms.
ARB guidance says architects should hold at least six years' run-off cover, five in Scotland, at the level held in the last year before ceasing practice. Deeds, collateral warranties and Defective Premises Act claims can run longer, so many practices consider more.
Tell us what your business does, your turnover and any claims. A broker reads every enquiry and comes back with options. No fee for a quote. Or call 0117 325 0027.
Get a PI quote Request a callbackApex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales, company number 07014570. This page is general information, not advice on your individual circumstances, and it does not guarantee that cover will be available or on what terms.
