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Business Insurance for Architects and Architecture Firms

Insurance for Architects

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As an architect, your clients trust you to design structures and buildings that are aesthetically pleasing as well as safe. Whether you are designing an office, restaurant, store, or home, your work can have a major impact on the psychological and financial well-being of your clients. Redesigning an office building or constructing a new home are large investments that people and companies undertake. If a mistake or miscalculation is made during the planning or design process, there can be serious consequences. A weak beam or poorly designed bridge can lead to physical injury. Often, these types of misfortunes can result in a lawsuit.

Because of the high risk factors associated with designing and constructing buildings, it is wise to consider business insurance for your architecture firm. Running a business in and of itself can open you and your employees up to a number of risks and liabilities. You might be interested in purchasing business insurance for your architecture firm if:

What insurance coverage do I need as an architect?

Common insurance policies for an architecture firm often include plans that appeal to all businesses, like commercial property and general liability insurance. For companies operating in a field that requires certification like architecture, professional liability insurance is one of the most important coverages to obtain. Listed below are the major insurance coverages you should consider.

Professional Liability Insurance or Errors and Omissions (E&O) Insurance

Everybody makes mistakes, but in your work as an architect, those mistakes can have serious repercussions for your clients. Because of the complex and detailed nature of building design, even a small error or omission can be extremely costly. If your customers believe that the work you have performed was substandard or error-prone and ended up costing them financially, they can sue your firm for damages. Professional liability insurance can protect you from the financial repercussions of client lawsuits stemming from your firm’s professional mistakes. And, unlike most professional liability policies, professional liability insurance for architects typically covers third-party bodily injury and property damage.


General Liability Insurance

General liability insurance can help protect you and your firm from the financial burden of a lawsuit that claims personal injury, client injury, or accidental property damage. It’s difficult to be certain how careful individuals will be when visiting job sites or when clients visit your office. General liability helps to safeguard your business against lawsuits from clients or third parties. The four types of coverage included in general liability insurance are: products & completed operations, property damage, bodily injury, and personal & advertising injury.


Commercial Property Insurance

Commercial property insurance protects your business property from damage caused by covered perils, typically including fire, windstorms, water damage from burst pipes, vandalism, and many other hazards. The included damage can happen to a building or item that you rent, lease, own, or have borrowed from someone else. Covered items include, but are not limited to: paintings, furniture, office equipment, and computers.


Cyber Liability Insurance

As a modern architecture firm, much of your work will be done on computers, tablets, and smartphones, all connected to various networks. Your company likely stores sensitive and confidential data, including everything from personal employee information to proprietary client blueprints. That’s why it’s important to guard your business against the negative impact of any technological mishaps. Cyber liability insurance can protect you from the financial consequences of hacking, viruses, data breaches, and other cyber perils.

Cyber liability insurance also covers the costs of:


Workers’ Compensation Insurance

While general liability insurance can cover the cost of injury to a person who is not employed by your firm, workers’ compensation covers work-related injuries and illnesses for your own workers. Almost all states require some form of workers’ compensation if your company has employees, though requirements for coverage vary by state. Receiving workers’ compensation benefits means employees also agree not to file a personal lawsuit against your company in the event of an injury. Workers’ compensation is no-fault, which means that it pays benefits regardless of whether the employer or employee is at fault for the injury.

Workers’ compensation can cover the costs of:


Business Owner’s Policy

A business owner’s policy, also known as a “BOP,” combines property, general liability, and business income and extra expense insurance coverages for qualified small businesses. By combining these coverages together, your architecture firm can save on premiums, as there may be discounts available for bundled policies.

Final Word

You have the privilege of creating beautiful spaces for your clients and their guests. However, you also face many risks through your professional work. If a client is unhappy with your work or suffers financial loss because of an error you make, you could be up against a financially devastating lawsuit. Simply running any business can also expose you to a host of liabilities. From a client getting injured on your property to a natural disaster damaging your offices, your business could encounter financial setbacks at any moment. That’s why it’s important to consider a comprehensive business insurance package. From professional liability insurance to general liability insurance, make sure you’ve obtained the right coverage for your architecture firm in order to protect your business and employees.

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