Is professional indemnity insurance compulsory?
In most states, it is now a condition of registration that an architect must have and maintain professional indemnity insurance that meets a minimum amount. In any case, the risk of practising demands it. Architects’ duty of care extends not only to their original client – architects are also vulnerable to claims from other aggrieved persons such as future purchasers of the building, contractors or a person injured due to an alleged deficiency in the architect’s design. Even if the claim is successfully defended, there may still be a large proportion of unrecoverable legal fees. And if the claim is successful, without insurance, the sole trader architect may be exposed to bankruptcy, or a company to liquidation.
