If you’re working in the architecture field, you’ve probably run into situations in which a client requires you to carry liability insurance. Maybe you run a small architecture firm with a few employees, or perhaps you’re a solo architect, draftsman or designer. Either way, you might find yourself wondering: Do I really need all this insurance coverage?
Of course, if a client says you or your on-staff architects need insurance, you have to have it if you want to get the work. But the good news is this: getting the required insurance coverage can be both affordable and good for your business.
Typically, clients want to see proof of some or all of the following three types of insurance from their architects:
General liability insurance
This type of liability insurance for architects covers damage or injury to your client’s people or property. Although many clients require it, architects, designers and draftsmen might wonder if general liability insurance is really practical and necessary. After all, what are the odds that someone making drawings in his or her own office will do any kind of damage to a client’s property?
Don’t take it personally. The fact is, client companies often require all vendors who may come to their office or job site – from construction crews to delivery people to architects – to show proof of general liability insurance. Often, it’s the corporate risk managers who set the requirement, demanding insurance for architects as well as all other contractors because they want to reduce the company’s risk of liability.
Thankfully, general liability insurance isn’t expensive. Architects who have it gain peace of mind from knowing that if one of their employees visits a job site and accidentally injures someone or damages something, it’s covered. Your landlord may also require you to carry general liability insurance if your architecture company has its own office space.
Professional liability insurance
Professional liability insurance is like malpractice insurance for professional architects, draftsmen and designers. It covers you for errors and omissions that you or your architecture consultants might make on the job. There’s a good reason that clients require professional liability insurance for architects: You’re only human, and people do make mistakes.
Your client’s greatest risk in hiring you as an architect is that you might make a miscalculation or error that causes a lawsuit or other financial loss. Although your company may be small, your client wants you to have deep enough pockets to compensate it for any potential losses if something should go wrong on a project.
For example, suppose your architecture firm is hired to design a new office complex. Once the building is complete, a design flaw is revealed that that allows water to seep into the building, causing masonry damage and mold problems. At a minimum, your client is likely to go after compensation from you to pay for the renovations needed to make the building safe. Without professional liability insurance, architects have to pay for their own legal defense as well as any settlement the court orders them to pay.
Without professional liability insurance, architects are fully liable for the rapidly increasing costs required to defend themselves from claims of errors or omissions. That’s a particularly dangerous situation for a smaller firm.
Workers’ compensation insurance
For professional architects, like any small business owners, workers’ compensation insurance can be confusing. While some states require that even solo practitioners and small firms carry it, others don’t. If your client’s company is based in a state that requires workers’ compensation insurance, your architecture firm will probably be asked to carry it, even if it’s not required by the state where you live or work.
Why? In some states, if you were to be injured while working on the client’s job, your client would have to cover you with its own workers’ compensation policy. And, in some states, your clients’ insurance carriers would bill them for coverage for all subcontractors who don’t provide their own certificates of coverage. In both instances, your client would pay more in premiums.
If your architecture company has even one employee, it’s just a good idea to protect yourself and those who work for you with workers’ compensation coverage. If you’re an independent architect, designer or draftsman and have your own health insurance, workers’ compensation insurance may actually be redundant. But in the end, when getting the coverage means getting the job, it’s worth the extra expense.
