In an increasingly litigious world, it is more important than ever to have the correct Professional Liability insurance cover, for both companies and individual employees – especially new graduates.
Although it is usually the company or practice that is named in a claim, increasingly as the LBP scheme requires personal sign-off for domestic dwellings, the individual in charge of a design is named, and therefore exposed, to a claims risk. It is important for new employees to be sure they have the appropriate cover.
Professional Indemnity Insurance is a “claims made” policy, meaning that it is the insurance policy in place at the time the claim is made that will answer the claim i.e. if a claim is made against you for work you did some years ago, it is the policy in place now (when the claim is received) that will be applied.
This timing issue can cause problems for employees of an architectural practice. If an employee leaves one practice to go to another, or to set up on their own, they have to trust that their old employer will maintain their PI policy for another 10 years so that the work done for that company remains covered.
I’ve previously talked about the differences between employees and contractors but if you are considering taking an architectural job of any nature with a new employer, you should check that they have Professional Indemnity and Public and Statutory Liability policies in place that include cover for you – not only while you are working for them, but also if you leave.
Most PI policies include employees and principals of a practice as “Insureds”, but you should check, and also check about the situation if you leave the practice. Does cover for your past work continue once you are gone? This is an important question for new architectural graduates to be asking.
It is important to note that your employer’s policy only covers you for work done for them. If you intend to do some work on your own outside the practice that employs you (or you are working on contract for a number of firms) you should have your own professional Liability Insurance policies.