Architects must be safe and plump for SFA/99
So some older architects are facing increasing difficulty getting professional indemnity insurance (AJ 10.7.03).
In fact, anyone with a practice profile out of the ordinary is at risk. This reflects severe problems in the insurance market.
With the ARB requirement for all practices to be insured, losing its PII policy is a sudden death sentence for a firm.
The RIBA's director of practice is quoted as saying there is little that the institute can do.
In fact, there are several measures architects, and the profession generally, can take to make architects more attractive to insurers. Legal costs for defending architects exceed the total paid out in claims. Insurers often settle because of the risk of substantial legal costs, not necessarily because a claim has much merit. Clients go on fishing expeditions, knowing that they are likely to be made a substantial offer. Much of this can be discouraged if the architect has contracted under SFA/99, which offers protection against unreasonable negligence claims.
Architects should be educated in other ways of acting defensively. If we can discourage settlements when claims have little merit, and reduce the costs of defending against claims, the profession could again become attractive to insurers.
I have long been advocating that the RIBA collaborates with insurers to develop measures to ameliorate this crisis. However, it seems surprisingly uninterested in an issue that has such severe consequences for a growing number of its members.
Until it takes this issue seriously, architects would be well advised to contract with clients using only the current edition of SFA/99 - and advising their insurers that they are doing so.
Stephen Yakeley, via email