Standard 8: Insurance arrangements
Standard 8 details what is expected of architects when making arrangements for Professional Indemnity Insurance (PII). The Standard itself is fairly simple and straightforward in what it requires architects to do, namely, to ensure they have both adequate and appropriate PII in place for all professional work.
It is made clear in Standards 8.1 and 8.3 that this responsibility extends to architects working independently, perhaps as sole traders, as well as architects employed by a practice. If you are unsure about whether or not you are covered adequately by your practice, it is essential that you speak to them directly to establish this. The responsibility for your PII ultimately sits with you.
We are often asked whether an architect needs PII in place when taking on small projects outside of their standard employment. The answer to this is yes, because liability doesn’t disappear or diminish with projects taken outside of formal employment. Although your professional involvement in some cases may seem minimal, the financial consequences can still be great.
Another frequent query is whether retired architects need adequate and appropriate PII in place. As a retired architect, it is important that you have run-off cover in place for a minimum of six years after you cease practice. Run off cover is a form of PII that comes into effect when you stop trading and will cover any past liabilities. This also applies if you are voluntarily closing your business or if you go into insolvency. Further guidance on run-off cover may be found within our PII guidance.
The importance of Standard 8 cannot be overstated as it protects both architects and clients alike. Failing to adhere to the requirements of Standard 8 risks serious financial consequences for architects and their practices and risks leaving clients without redress. This in turn has the potential to compromise public trust and confidence in the profession. The seriousness of such a breach is perhaps best exemplified when looking at past Professional Conduct Committee (PCC) cases dealing with this issue. Past cases have stemmed from a wide range of issues including architects failing to hold adequate and appropriate cover; failing to provide evidence of that insurance to ARB; dishonestly declaring to have professional indemnity; and failing to maintain adequate insurance. These failings have resulted in architects receiving serious sanctions including in some cases, erasure. You can search our published Professional Conduct Committee decisions for further examples of cases involving Standard 8.
We appreciate finding adequate and appropriate PII can be a daunting and challenging task for architects, made even more difficult by hardening market conditions over recent years. If faced with such a situation you can speak to ARB and your broker for advice on how to proceed in obtaining PII and ensuring you meet your professional obligations under Standard 8.
We hope you found this advice useful. We are here to support you through regulation, and the Professional Standards team is on hand to provide further advice and guidance on professional obligations under the Code. Contact us if you have any concerns or queries and we will be happy to help.