Architects: Insured Or Not?

Architects face a variety of risks in their work, from missed deadlines to cost overruns and even personal injury. As such, it is important for them to carry insurance to protect themselves and their businesses. The type of insurance an architect needs will depend on their specific circumstances, such as the number of employees they have, the location of their business, and their claims history. While some insurance is not required by law, it is often recommended for architects to carry professional liability coverage given the nature of their work. The cost of architect insurance varies depending on the policies chosen, the risks faced, and the value of business equipment, but it typically includes professional liability insurance, general liability insurance, and a business owner's policy.

Professional liability insurance

While not required by law, it is often recommended for architects to carry professional liability insurance given the nature of their work. Architects who work privately or own their businesses should strongly consider this type of insurance to protect themselves from claims and lawsuits brought by clients, vendors, or employees. Professional liability insurance can provide coverage for personal injury, defence costs, negligence, and claims against past-rendered services. It is a crucial tool for providing peace of mind and protecting one's livelihood.

The cost of professional liability insurance for architects can vary depending on various factors, including the number of employees, business location, and claims history. The median cost of professional liability insurance for architects is $1,730 per year, with rates ranging from $300 to $4,000 annually. It is important to note that professional liability insurance does not cover every kind of liability claim, and architects may need additional insurance coverages, such as general liability insurance and workers' compensation insurance, to ensure well-rounded protection for their business.

General liability insurance

The cost of general liability insurance for architects depends on various factors, including the size and location of the business, as well as any prior claims. The median cost for architects is $35 per month or $425 annually, with a policy limit of $1 million per occurrence and a deductible of $500.

Architects can also opt for additional coverages, such as electronic data coverage, which restores destroyed or corrupted files, and fraudulent transfer coverage, which protects against the loss of money, securities, or property due to fraud.

When choosing general liability insurance, architects should obtain multiple quotes and carefully compare premiums and coverage limits, as rates can vary significantly between providers.

Business owner's policy

A Business Owner's Policy (BOP) is a type of insurance that combines business property and business liability insurance into a single policy. This type of insurance is ideal for small businesses, as it provides comprehensive coverage at a lower cost than purchasing separate policies. A BOP can be customised to meet the specific needs of a business, including adding coverage options such as business income for off-premises utility services and other specialised policies.

A BOP typically includes general liability insurance and commercial property insurance. General liability insurance protects a business and its assets in the event of a lawsuit for negligence, bodily injury, property damage, libel, and slander. Commercial property insurance, also known as business property insurance, covers owned or rented buildings, tools, and equipment used to operate the business. This includes protection against fire, theft, wind, and lightning damage.

The cost of a BOP will depend on various factors, including the policy limits, business property value, location, industry, and risk factors. Small businesses pay an average of $57 per month for a BOP, or about $684 annually. However, rates can vary significantly depending on the specific circumstances of the business.

For architects, a BOP can provide essential protection against common risks such as lawsuits arising from bodily injury or property damage claims. It can also cover losses due to fire, theft, or other covered disasters. Architects can further customise their BOP by adding additional coverages such as professional liability insurance and commercial auto insurance.

Commercial auto insurance

The cost of commercial auto insurance depends on various factors, including vehicle type and value, location, employee driving records, policy deductible, and limits. On average, commercial auto insurance costs $147 per month, but 37% of small business customers pay less than $100 per month.

Workers' compensation insurance

This type of insurance also includes employer's liability insurance, which is essential if an employee decides to take legal action against the business owner due to a work-related injury. Even if the lawsuit is frivolous, employer's liability insurance can cover the costs of a legal defence, protecting the business from financial strain.

The cost of workers' compensation insurance for architects varies depending on factors such as the state, business operations, number of employees, payroll, and claims history. The median cost for an architecture firm is approximately $50 per month or $600 annually, but rates can differ based on specific circumstances.

By investing in workers' compensation insurance, architectural firms can mitigate the financial risks associated with workplace injuries and ensure that their employees are taken care of during difficult times. It is a vital component of a comprehensive business insurance plan, demonstrating the firm's commitment to employee well-being and legal compliance.

Frequently asked questions