Are you fully covered?

Professional indemnity insurance needs to be maintained even after you’ve given up practising

The obligation to hold professional indemnity insurance will be regarded by many as a key part of carrying out their professional roles as architects.  Few would dream of carrying out services without professional indemnity insurance (PII), because of the financial risks should the worst happen and a claim for negligence be brought against them. 

However, it is not simply a case of maintaining insurance during your years of practice.  Remember that claims may be brought after you stop working. 

Having PII while you are practising is not enough to cover claims brought after you retire. Cover is held on a ‘claims made’ basis, so it is the PII you have in place at the time that the claim is made (be that six months or six years after you ceased practising), that will respond to the claim made.

Your broker will no doubt be able to advise you for how long you will need to maintain insurance after you stop practising, but you also need to be careful that the insurance you believe to be in place does actually cover the services you have provided.

A recent decision of the Professional Conduct Committee of the Architects’ Registration Board puts this in to sharp focus.  Following a complaint against an architect (whom for this article we shall call Mrs T), Arb became involved to establish that Mrs T was covered by professional indemnity insurance.  Mrs T was slow to provide evidence of insurance covering the works she had carried out in her personal capacity, instead providing copies of insurance for the services she provided when employed by another company.

Arb considered that Mrs T’s failure to hold insurance in a personal capacity meant that she was uninsured for the work she had carried out as a sole trader.  Arb was concerned that Mrs T had little insight in to her failings.  She did not appear to appreciate that the professional indemnity cover for the company would not cover her in a personal capacity, or that the insurance in place at the time she carried out the services would not cover claims made after the event.


Mrs T did not appear to appreciate that the professional indemnity cover for the company would not cover her in a personal capacity, or that the insurance in place at the time she carried out the services would not cover claims made after the event.

The failure of Mrs T to hold adequate and appropriate insurance cover for herself and her practice was a serious breach of the Architect’s Code Standards of Conduct and Practice 2010.  Arb was clear that failure to effect adequate PII puts both architect and client at risk, and that members of the public should be able to expect that their architect has sufficient professional indemnity cover in place.  Failure by an architect to have appropriate cover in place severely compromises not just the reputation of the architect personally but also that of the profession as a whole.

For this reason, Arb’s Professional Conduct Committee decided to impose a two year suspension upon Mrs T, preventing her from practising during that period.  The level of sanction shows how seriously Arb takes these matters, and how important it is to ensure that architects hold proper PII.  This 2 year sanction was imposed even though Mrs T had no adverse regulatory history, and did engage in the regulatory process, although many of her responses to the Arb were somewhat evasive and failed to meaningfully address its concerns.

The lessons to be learnt from this are: first ensure that the professional indemnity insurance you have in place will be held for the required period after you have ceased practising; and secondly, ensure that you hold PII in a personal capacity if you carry out work on a personal basis, rather than simply relying on held by your employer.



Repudiatory breach is a breach of a contract which entitles the other party to deem the contract to be brought to an end.  The innocent party can accept the repudiation, and claim damages from the breaching party, or in some circumstances the innocent party could decide to affirm the contract (that is, decide to continue with the contract despite the breach).  This might be the best choice where, for example, it would be more profitable to continue operating as if the contract existed rather than bring the contract to a close.

There is no particular type of breach which amounts to repudiatory breach.  A repudiatory breach simply needs to be a breach that deprives the innocent party of substantially all of the benefit of the contract.  A wrongful termination might be repudiatory breach, as might one party’s refusal to perform its obligations under the contract.  Non payment does not usually amount to repudiatory breach, even with a repeated pattern of non-payment, because alternative remedies (such as suspension or charging of interest) are available.  Only where the repeated pattern of non-payment indicates that the payor has abandoned the contract might such non-payment amount to repudiatory breach.

Alistair McGrigor is a partner with Nabarro LLP