Architect professional liability insurance is coverage that protects your clients’ firm and employees against claims arising from, or alleging negligent acts, errors, or omissions in the performance of their services. One problem many insurers face is due to the fact that some architects overestimate the costs of insurance instead of appreciating the associated benefits. The fact that this coverage aids in the legal costs to defend against a claim is perhaps one of its most valuable benefits.
For instance, the insurance company can provide a lawyer to help the architect compile and retain necessary documentation, thus avoiding having to take subsequent actions that could quite possibly weaken the architect’s defense. This policy is different from commercial general liability, or CGL, insurance, which covers various types of accidents or property damage that could happen at any business. CGL policies are relatively standard regardless of the type of business and usually exclude professional liability claims.
Defending claims can cause serious financial hardship
If and when a claim does go to trial, a small firm could easily be bankrupted just attempting to get a dismissal. In most cases, legal assistance may be even more valuable than having coverage to pay for any actual proof of negligence. In addition, the best professional liability insurers offer ongoing risk management services to insured firms, which often include legal review of standard and client-provided contracts, and targeted continuing education on ways to reduce or avoid unnecessary liability.
For the most part, Architect professional liability insurance claims are more likely to be the result of a failure to manage expectations than due to any construction failure, particularly where the client has little knowledge or experience when it comes to construction projects. Their expectations may be unrealistic, but that alone doesn’t prevent claims from being filed, let alone their going to trial or arbitration.
A perfect example would be in the case where an architect is reluctant to explain delays or cost overruns to the client, resulting in the client becoming frustrated and demonstrating a lack of trust. Having good communication skills can cement some much-needed trust and avoid bigger issues springing up. This is just one example of the type of situation that can trigger a professional liability claim without an obvious failure on the part of the architect to properly design a safe, high-quality structure.