Insurance for architects and engineers: a straightforward guide

Due to the very nature of the industry, design and build projects are a huge responsibility and if things go wrong the sums involved in rectifying a mistake can be eye wateringly high.

Anything from an error in a design to a simple administrative mistake could see a claim brought against your firm. For this reason, it makes sense to have comprehensive architects and engineers insurance in place to help protect your business from costly payouts.

In this handy guide we take a look at what insurance architects and engineers need. We will also explain what each of these policies protect you against specifically.

What insurance do architects need?

As stated in Standard 8 of the Architects Code of Conduct, to join the Register of Architects, you must be covered by professional indemnity insurance. This could be through the firm you work for or as an individual policy that covers you as a freelancer. We will explain exactly what this type of insurance covers later in this guide.

To protect against third-party damage or personal injury claims, public liability insurance is also a sensible choice. As is portable equipment insurance. Finally, if you run a business that employs architects, having employers’ liability insurance is a legal requirement.

How much is professional indemnity insurance for architects?

As you’d expect, the cost depends on the amount of professional indemnity insurance an architect needs. In turn this depends on a range of variables. For example, your income, the type of projects you work on and the level of cover you need.

However, some guidelines are provided by the industry-trusted Royal Town Planning Institute (RTPI). These state:

- For those with an annual fee income below £40k, a minimum of £100,000 worth of cover is needed.

- For those with an annual fee income between £40k and £199,999, two and a half times your gross annual income should be taken out in professional liability cover.

- For those with an annual fee over below £200k, a minimum of £500,000 worth of cover is needed.

At Markel, architects' insurance starts from £5 per month*. Get a quote here.

What insurance should a structural engineer have?

In a similar way to architects, structural engineers can face many risks, for allegations of negligence to health and safety breaches. For this reason, engineers' insurance is vitally important.

Again, professional indemnity insurance and public liability insurance are the key policies for engineers to consider. However, employers’ liability insurance is also a must if you employ staff. Due to the sometimes physical nature of the job, personal accident cover can also be a sensible insurance policy to hold as a structural engineer.

How much does professional indemnity insurance cost for an engineer?

Again, the cost of professional indemnity insurance depends on how much cover you need. Naturally, the more complex and large-scale project you work on, the more money you’ll need as a pay-out if something goes wrong. Therefore, as a rule of thumb, you should consider the worst possible scenario and how much that would cost in legal fees and potential compensation pay-outs. You can get an idea of how much this would cost by looking at claims examples online.

At Markel Direct, our tailored engineers’ insurance, which includes professional indemnity cover, starts from £5 a month*. You can get a quote in as little as 90 seconds here.

Types of architects and engineers insurance explained

As mentioned above, there are three main types of cover architects and structural engineers often require. Below we explain what these types of insurance protect against, as well as looking at other common policies in these fields.

Professional indemnity insurance

Professional indemnity insurance can be necessary for any architect or engineering consultant. This is because the work they provide is typically for third party clients. In the event of an allegation or claim made against you, professional indemnity insurance will financially protect you. In some cases, clients may require an architect/engineer firm to have professional indemnity cover before they will work with you.

At Markel Direct, for the majority of activities we can offer cover on an any one claim basis. This means you get the full limit of indemnity for each and every claim during the policy period. For certain activities, cover is provided on an aggregate basis. This means that the limit of indemnity is the maximum amount that we will pay out during the policy period. You should bear this in mind when selecting your limit of indemnity. For further information about and any one claim basis and aggregate basis, check out our frequently asked questions.

Public and product liability insurance

Public/product liability insurance can also be essential for architects and engineers. These policies protect you if someone is injured (or third-party property is damaged) on the job. This could be during a site visit or when products are being delivered, for example. Depending on the size of your policy, all costs relating to defending your business paying damages are covered. This is even the case if you are found to be at fault.

Employers’ liability insurance

Employers’ liability is a statutory requirement as soon as you have any employees. Cover is provided for your employees for claims due to injury or illness as a result of their activities under your employment. It is possible for claims to be made many years after employment has ceased.

Directors and officers liability insurance

Directors and officers insurance protects the directors and officers of a company from potential lawsuits. These may come from shareholders, employees and/or creditors. Afterall, directors and officers can be held accountable for numerous actions. Common claims include misuse of company resources, fraud, lack of due care and attention, and failure to follow workplace legislation. Cover is provided for defending you as a director or officer against allegations of wrongful acts and any damages subsequently awarded against you.

Business and portable equipment insurance

Business interruption cover protects you against loss of income and/or increased costs of working incurred due to an unexpected event. This can include fire damage, theft or flooding.

Markel Direct has over twenty years’ experience in this sector. We provide expert cover for architects and engineers of all descriptions. Cover is available from £5 a month* and some of the activities that we can insure online include:

• Design and Planning
• Electrical and/or Lighting consultancy
• Feasibility studies
• Heating, Ventilation and Air Conditioning
• Interior Design
• Land surveying
• Landscape architecture, planning and/or garden design
• Mechanical and/or Refrigeration engineering
• Quantity surveyors
• Planning supervisors
• Draughtsman
• Project coordination
• Town planning and/or urban design
• Transport, traffic and highways engineering

(This is not an exhaustive list; if you cannot find your activities listed on our website, call us on 0800 640 6600.)

You can also take advantage of the option to pay by ten interest free instalments, helping spread the cost of cover while you tender and complete your contracts.

Get a quick quote for your business insurance now.

*Example premium is based on a public liability insurance policy with a £1m limit of cover for an architect.