Amid increasing difficulty in finding insurance coverage for the architecture and construction sectors, architects accounted for more than a third of all professional indemnity claims submitted last year, a recent report from PolicyBee has revealed.
Despite making up of just 6% of all policies and 10% of the total value, architects made 38% of all PI claims in 2020, according to the Suffolk-based insurance broker’s latest claims report.
Ongoing issues in the construction industry – including several failed basement conversions and concerns about building cladding brought about by the Grenfell Tower disaster – led many insurers to deem the sector high-risk.
The situation has made it challenging for architects to find adequate PI cover as some insurance providers have raised premiums and excesses by up to 400%, introduced major exclusions within their policies, or pulled out of offering cover altogether.
The report said that if companies were able to get cover, it was “not always fit for purpose,” adding that the average capacity per underwriter has dropped by half in the last 18 months from £5 million to £2.5 million.
“Unfortunately, we expect challenges surrounding PI insurance to remain for a few years yet,” said Yasin Akdemir, architects’ insurance specialist at PolicyBee. “As well as rising premiums, policy renewals are another area of concern for architects as some insurers are ceasing to provide cover for the industry. Others are asking for far more information from customers than they used to, which of course takes time and can cause a bit of a paperwork headache for architects.”
In a statement, PolicyBee said that one way to address the problem is to use a specialist insurance broker.
“They have the advantage of being able to use their market knowledge to approach different insurers to find the most suitable policy at the best price,” the insurer said. “Brokers can save customers time and stress by doing the legwork and – crucially – checking policy wordings to ensure the necessary level of cover is provided.”
“Historically, architects have been responsible for putting in high numbers of PI claims at PolicyBee,” Akdemir said. “These often stem from common issues such as communication breakdowns between architects and their clients or builders failing to report or correct design problems. There is no doubt all businesses in the industry need the best level of protection from PI claims and their associated legal fees and compensation claims.”
With PI claims remaining high for architects, PolicyBee also urged those renewing their policies or looking for new ones to check the level of cover provided carefully, and well in advance of the date required.