Ipswich insurance broker PolicyBee has published its annual Claims Report, revealing architects made 38% of all professional indemnity claims submitted last year, amid issues surrounding insurance coverage for the industry.

Finding professional indemnity insurance has proved an increasing challenge for architecture and construction businesses over recent years. So, news that a large number of PolicyBee’s professional indemnity (PI) claims last year were made by architects serves as a reminder of how important it is to secure cover. Architecture businesses make up just 6% of all policies and 10% of total value at broker PolicyBee, yet made over a third of PI claims in 2020.

Ongoing issues in the construction industry, such as the number of failed basement conversions or concerns over cladding on buildings since the Grenfell Tower disaster, have been causing nervousness amongst insurers who deem it a high-risk sector. The difficulty for architects to find adequate PI cover, referred to as a ‘crisis’ by industry experts(1), has increased as some insurers have pulled out of offering cover altogether, raised premiums and excesses by up to 400%, or introduced major exclusions within their policies. If companies can get cover, it is not always fit for purpose. The average capacity per underwriter halved in the last 18 months from £5 million to £2.5 million(2).

With architects continuing to make large numbers of PI claims, the need for comprehensive cover remains as much a priority to businesses as ever. One way to tackle the problem of finding cover 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. Brokers can save customers time and stress by doing the leg-work and – crucially – checking policy wordings to ensure the necessary level of cover is provided.

Yasin Akdemir, architects’ insurance specialist at PolicyBee, said: “Unfortunately, we expect challenges surrounding PI insurance to remain for a few years yet. 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. This means the entire renewals process is taking longer so architects need to start thinking about it earlier than they usually might.

“Historically, architects have been responsible for putting in high numbers of PI claims at PolicyBee. 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. PI insurance is the first line of defence if a client isn’t happy with the work provided and brokers are a great solution for finding the right cover.”

With PI claims remaining high for architects in 2020, those renewing their policies or looking for new ones are urged to check the level of cover provided carefully and well in advance of the date required.

For more on PolicyBee’s 2020 claims report go to: https://www.policybee.co.uk/business-insurance-claims-in-close-up

(1) https://www.bdonline.co.uk/spiralling-insurance-premiums-are-putting-architects-out-of-business/5108848.article
(2) https://www.postonline.co.uk/commercial/7797701/pi-profile-construction-sector-locked-out-by-high-rising-premiums