Architects’ regulator seeks to change insurance rules

The Architects Registration Board (ARB) has published new draft guidance on the insurance arrangements architects are expected to have in place to remain compliant with its code of conduct as it looks to address the issue of spiralling costs of cover.

With reports of some practices facing an annual doubling of the cost of PII cover over several years, some say that it is now becoming unaffordable, especially in the context of the increasing number of exclusions that some insurers are adding, such as cladding or basements.

The architects code of conduct sets out the PII that architects are expected to have in place, which is underpinned by ARB guidance which explains how compliance with the code can be achieved. However, it has become increasingly apparent that for some architects, changes in the insurance market outside their control means that meeting the existing guidance may no longer be possible.

Under ARB’s proposed changes are measures that would ensure coverage for certain types of claims – including fire-safety and cladding – could be held on an aggregate basis, and limited to covering direct losses. It is proposing that it would no longer be a matter of misconduct if an architect cannot acquire retrospective insurance to cover historic liabilities, because of new exclusions applied to their policy. And it also suggests that no architect should accept a minimum level of cover below £250,000 for each and every claim.

The draft guidance has been produced following research and engagement with the insurance market and professional bodies. ARB is now asking for wider views before it is finalised and comes into force later this year. ARB’s intention is to bring in changes which are proportionate and risk based, whilst acknowledging that there are wider structural issues with the global insurance market which ARB cannot resolve on its own.

Alan Kershaw, chair of the ARB, said: “Professional indemnity insurance provides crucial protection to architects, their clients, and the people who use their buildings. ARB has to balance the need for public protection with the availability of insurance. We can’t set requirements that, however well-intentioned, architects simply cannot achieve.

“The updates to our guidance on PII are intended to clarify how architects are expected to deal with professional indemnity insurance at this difficult time, while still protecting clients and future users of the buildings they design. We now want to hear from architects, insurers and the groups that represent consumer interests.”

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