The Function And Liability
Architects principal function is design and specification of buildings. The main transfer of risk is in the form of remediation costs incurred by third party clients who contract the architect to implement a build. The proximate cause of loss is the design fault. A significant proportion of indemnity in addition to reinstatement of construction due to design error is cost of defence, which can amount to much higher levels of payout by insurers than the actual cost of claim to remediate a build.
The Exposure And Reason To Protect
The situation of the architect is typically ,on larger projects, as contractor to a main contractor build company. In conjunction with the architect there will be a number of sub contractors for specialist works. Apart from design responsibility the architect is likely to supervise stages of works under contract.
Omission to identify errors by sub contractors can implicate the architect under their own insurance cover. Joint and several liabilities in law mean that a pursuant party can sue the architect even if only culpable by a small percentage if at all, or by failure to supervise.
This creates a cross fire of liability, often notwithstanding any real design error by the architect. This is akin to a competent driver being involved in a road accident not of their making, but liability is incurred.
Many claims in recessional times have sprung from fee recovery against contractors where a counterclaim for negligence is raised to avert or mitigate payment of fees due to the architect. There is often no fault on the architect but the cost of defence qualities as a claim against the policy.
Financial failure by the main contractor can leave third parties adrift on completion of the project and subsequent claims can divert to the architect as the next main insured entity in the project.
The ‘grumbly’ client. Too often a client may be difficult and complains about aspects and picky points of works undertaken. Are these claims? They can be, later they manifest as lodged claim issues. This is the importance of the innocent non disclosure cover to eliminate the doubt of whether a complaint is a claim.
Contractual Extension Of Liability
Collateral Warranties are often required to commit the architect to longer term liability after hand over of the development to a purchaser and then on to subsequent buyers or lease holders.
Terms and conditions of the warranties need to be vetted against the terms of the insurance policy to ensure integrity of coverage. This can also be said of novation contracts which may extend liability beyond that originally contemplated by insurance cover.
What Wimsure can do
Wimsure Underwriting Ltd specialises in architect cover and has developed a wider cover than many insurers. The coverage advantages are:
- Full Civil liability including consequential losses
- Full pollution , asbestos and toxic mould cover to policy limits
- Provide for court attendance loss to the practice
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