Why is insurance a must for architects?
Designing buildings may be rewarding, but it also comes with many risks. Even the most experienced architects can make a mistake that could injure someone or cause financial loss. Architect insurance offers peace of mind by providing protection against client lawsuits, injuries, data breaches, and more.
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6 insurance policies every architect should consider
These insurance policies protect against the most common risks and liabilities in the architecture industry.
Professional liability insurance
Professional liability coverage handles lawsuits related to professional negligence, such as a mistake in your blueprint. It's also referred to as errors and omissions insurance or E&O insurance.
- Missed deadlines
- Breach of contract
- Design errors and oversights
General liability insurance
A general liability insurance policy defends against third-party lawsuits, such as a client who slips on a wet floor at your office and injures themselves. It's often required for a commercial lease.
- Client bodily injuries
- Accidental damage to a client's property
- Defamation and copyright infringement lawsuits
Business owner's policy
A business owner's policy, or BOP, combines commercial general liability coverage and commercial property insurance at a discount. Small firms are often eligible for this bundle.
- Slip-and-fall injuries
- Defense costs from client property damage
- Business property damage
Workers' comp insurance
Workers' compensation insurance protects design firms and sole proprietors from work-related medical bills health insurance won't cover. Most states require this coverage for employees.
- Medical expenses from workplace accidents
- Disability benefits for injured workers
- Legal costs from work injuries
Cyber insurance
Cyber insurance helps design professionals recover from costly cyberattacks and data breaches. It's also called cyber liability insurance or cybersecurity insurance.
- Ransomware attacks
- Client notification costs
- Data breach investigations
Commercial auto insurance
Almost every state requires commercial auto insurance for vehicles owned by an architecture business. It covers costs in the event of an accident involving your business vehicle.
- Auto accident legal fees
- Vandalism or other vehicle damage
- Vehicle theft
Architect insurance costs
From our customer data, here's a quick look at design insurance costs. On average, architects pay the following for coverage:
General liability: $33 per month
Business owner's policy: $57 per month
Professional liability: $141 per month
Factors that insurance companies consider when underwriting your insurance premiums include:
- Your professional services offered
- Number of employees
- Value of your business property
- Types of insurance products purchased
- Coverage limits and deductibles
- Claims history
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Why architects choose TechInsurance
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Common questions about business insurance for architects
Review answers to frequently asked questions (FAQs) about architect business insurance coverage.
Is liability insurance required to get an architect license?
Generally, insurance coverage isn't required in order to obtain your architecture license. However, the specifics depend on the laws in your state. Your clients might also require you to carry insurance as part of the terms of a contract.
In most states, architects must complete the following to meet licensure requirements:
- Earn a degree accredited by the National Architectural Accrediting Board (NAAB)
- Document real-world experience through the Architectural Experience Program (AXP)
- Pass the Architect Registration Examination (ARE)
In addition, architects typically have to pay an application fee and renew their license after a certain number of years have passed.
What other insurance coverage do architects need?
There are a couple of additional types of business insurance policies you should consider as part of your risk management plan to cover liability exposures and potential financial loss:
- Commercial umbrella insurance: Umbrella insurance covers legal expenses when the limit is reached on another liability policy, such as general liability, employer's liability insurance, or commercial auto insurance. Sole proprietors may need this coverage to meet client requirements for higher liability limits.
- License/permit bonds: License and permit bonds act as a guarantee that your architecture firm will abide by building codes and meet industry standards in all of its work. Bonding may be required to get a license, sign a contract, or obtain a permit for a specific project.
