This case study is an anonymised composite based on publicly reported PI claim patterns. It is not actual Apex client data and does not constitute legal or insurance advice. Names, locations and identifying details have been changed. Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority, FRN 724952.
A medium-sized practice with twenty architects in two offices, fee income around £6.4m. Mixed portfolio with substantial work in mixed-use residential-over-commercial buildings of three to six storeys, education and social housing. Long tenure on lead consultant appointments.
The project was a six-storey mixed-use building completed in 2013, with ground-floor commercial use and 38 apartments above on a partial podium. The architect was lead consultant through to Stage 4 with a continuing role through construction under a “design quality oversight” appointment.
The issue identified post-Grenfell was not the cladding system — which was a brick rainscreen with mineral wool insulation, well within post-Grenfell standards — but the internal fire compartmentation of the building. Investigations during the post-Grenfell PAS 9980 appraisals identified several issues: cavity barrier omissions at horizontal compartment lines, a riser shaft that had not been fire-stopped at floor penetrations on three levels, and discontinuities in the fire-rated ceiling line at certain interface conditions between the residential and the commercial uses.
The post-construction fire risk appraisal concluded that the building did not satisfy the standards prevailing at the date of construction in respect of internal compartmentation; this was not a “post-Grenfell standards have moved” problem but a “the building did not meet the standards of its own time” problem. The cause was a combination of design defects at the residential-commercial interface (an architect issue), fire-stopping defects in the as-built construction (a contractor and fire-stopping sub-contractor issue), and an inadequate site quality assurance process during construction (where responsibility was contested between the architect’s oversight role, the contractor’s site team and the building control body).
Remediation costs were estimated at approximately £1.9m, of which approximately £450,000 reflected the design-cause element attributable to the architect’s design at the residential-commercial interface.
The freeholder claimed against the developer, the contractor and the architect. The claim against the architect was framed under the Defective Premises Act 1972 as extended by the Building Safety Act 2022, in negligence under Hedley Byrne principles, and in breach of the architect’s appointment. The pleaded loss against the architect was approximately £620,000.
The architect’s defence engaged several points. First, the architect’s design was developed to RIBA Stage 4 standard and the working drawings for site execution were developed by the contractor’s technical team; the as-built defects were significantly construction defects, not design defects. Second, the design quality oversight appointment was a non-resident periodic site visit role, not a clerk-of-works function; the architect’s duty did not extend to identifying every fire-stopping discontinuity during construction. Third, the building was signed off by an Approved Inspector under the Building Regulations regime then in force; the inspector’s certification was the principal pre-Grenfell QA mechanism and the architect was entitled to rely on it.
These defences had real force and the matter resolved at mediation at approximately £280,000 against the architect — substantially below the pleaded quantum, reflecting the design vs construction apportionment.
Section 5 notification was made on receipt of the freeholder’s letter of claim. The wording in place at notification responded — the work predated any cladding/fire safety exclusion the firm later accepted at renewal.
A coverage question arose on defective workmanship wording. Some PI policies contain language that limits cover for losses attributable to defective workmanship as opposed to defective design. The firm’s wording in place did not contain such an exclusion. The proximate cause of loss, as analysed in the defence, was a combination of design and workmanship; the firm’s wording responded to its share of liability without coverage dispute.
A separate question arose on the “prior known circumstances” language under section 3 of the Insurance Act 2015. At the renewal preceding the freeholder’s claim, the firm had disclosed broad post-Grenfell engagement on residential buildings as a category of work the firm was reviewing; it had not specifically identified this building as a known concern, because at the renewal date no specific defect had been identified and no claim or circumstance had been notified to the firm. The insurer accepted, on careful review, that this was correctly handled fair-presentation disclosure under the Insurance Act 2015 standards.
The £5m limit was sufficient. The £50,000 excess applied. The matter settled at approximately £225,000 inclusive of the freeholder’s contribution to costs.
The settlement was paid. The firm undertook a structured PAS 9980 engagement programme across its historic residential building portfolio; in several other cases the firm has been engaged constructively rather than adversarially. The Building Safety Act regime’s documentation requirements (the “golden thread” of building information) have produced a substantial internal records exercise — the firm has identified gaps in its historic project records that complicate but do not prevent its engagement in the BSA regime.
At renewal, the firm’s PI premium rose by approximately 65%. The renewal involved acceptance of a fire-safety exclusion for new higher-risk building work unless the firm declined the instruction, and a tighter aggregate sub-limit for fire safety-related claims on historic work. The wording negotiation was substantial.
Compartmentation and fire-stopping claims are the second major front in architects’ PI exposure after cladding. First, the historical building record matters; the BSA “golden thread” requirements mean that historic documentation gaps are increasingly material in claim analysis and renewal disclosure. Second, the architect’s appointment terms — particularly the scope of any oversight or quality assurance role during construction — define the realistic exposure horizon; “design quality oversight” is not clerk-of-works and the appointment language should make that clear. Third, defective workmanship exclusions on PI policies vary substantially; firms should benchmark their wording. Fourth, fair-presentation disclosure under section 3 Insurance Act 2015 requires a sensible-but-thorough engagement with known categories of risk on the firm’s historic portfolio; broad disclosure of post-Grenfell engagement does not require specific identification of every potentially affected building, but should evidence the firm’s portfolio-level approach. Fifth, the renewal negotiation on the fire safety exclusion is the most consequential single discussion in the current architects’ PI market.
The fire safety exclusion negotiation at renewal is where specialist broking earns its fee in this sector. We have detailed comparative wording knowledge across the architects’ PI market and know which insurers will accept which framings on which classes of building. On notification, the framing of a fire-stopping notification — whether it is treated as cladding-adjacent (and therefore at risk of exclusion) or as a separate internal compartmentation matter — has real consequences. At the BSA documentation engagement stage, we work with practices on the renewal narrative that distinguishes between firms with disciplined historic records management and firms that approach BSA engagement reactively.
Apex Insurance Brokers serves UK professional services firms and commercial businesses. Call 0117 325 0027, email hello@apexinsurancebrokers.co.uk, or request a quotation.
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