It is almost impossible to measure the value of insurance until one has experienced a loss or damage for which there is no insurance. Few people or businesses have sufficient spare cash to pay for the consequences of serious loss or damage, and the profit margins of UK practices are generally insufficient to bear the cost of unexpected events of any kind. And yet, professional indemnity insurance (PII) is a subject no one wants to know about until something happens that requires lawyers and insurers to save the day.
As clients become more aware of fire safety and cladding issues, and with the Building Safety Act extending periods of liability, architects are increasingly likely to experience an allegation of professional negligence. It’s never been more important to protect your reputation.
I spent my mid-career at Austin-Smith:Lord, a member of the Wren Insurance Association. This is a mutual insurance association that manages its risk through a comprehensive and educational risk management culture.
There, I saw what ‘good’ looks like. I learned that professional risk management should not be a dry, box-ticking exercise carried out by some faceless specialist in the corner of the studio, but a collaborative and empowering discipline, supporting the quality of the design product, increasing practice efficiency and underpinning the livelihoods of architects.
Not everyone can join the Wren but with the support of specialist PII brokers and adopting the principles outlined in RIBA’s new Guide to Professional Indemnity Insurance, every practice can improve its professional risk management culture.
Here are 10 tips to protect your reputation:
- Use a specialist insurance broker. No other source of advice or protection is better value than good quality PII, so buy good quality insurance from a specialist PII broker who understands the profession. It’s not more expensive than buying online and is infinitely more reliable when you need to call upon it.
- Get a head start on your insurance renewal. Put a note in your diary and start the process well before the renewal date – it’s a project, not a Saturday morning online grocery purchase!
- Agree first-day terms with your client. Never, ever, commence a service, however small, without agreeing ‘first-day terms’ with your client. This is a letter or email setting out what you are doing, under what terms and for what fee in the initial days – yes, even if it’s pro-bono, and even if you intend to agree more comprehensive terms soon.
- Insist on simple, consistent record keeping. The architect’s best intentions can be derailed by the commercial priorities of others. Focus on the things you can control, and insist on simple, consistent record keeping, filed somewhere it can be found.
- Make professional risk management your personal concern. No one is coming to save you. However much you pay them, no one has more interest in your professional reputation than you, and it can’t be delegated. Make professional risk management in your practice your personal concern. It can be more rewarding (and even creative) than you might imagine and, ultimately, give you better steerage of your design product and practice objectives.
- Use the RIBA’s Practice in a Box. This collection of tools and resources to help you run your business and manage projects includes support for newer and less experienced practices.
- Carry out a regular audit to keep records in order. Claims are time-consuming and expensive, even when you are not at fault, so give your insurer the best chance of supporting you. Carry out a regular audit to ensure key records are in place for each project and can be easily found.
- Know the risks. Being aware of what can go wrong is a huge first step towards preventing it.
- Don’t be in denial. Crises are inevitable so get in front of the problem. Create a practice culture of flagging anomalies, mistakes and alleged mistakes internally as soon as they are identified.
- Read the RIBA Guide to PII. The new guide busts jargon and outlines how insurance works, how to buy good quality insurance, and the importance of being risk-aware. Share it with colleagues, and read it little and often.
Jennifer Dixon is an architect, chair of the RIBA Council Expert Advisory Group on PII (2020-2023) and chair of the RIBA Practice and Policy Committee. The guidance author of the RIBA Guide to Professional Indemnity Insurance is insurance expert Roger Flaxman.