FAQ
A series of frequently asked questions relating to membership and insurance with ArchiTeam. Using the Ctrl + F or Cmd + F functions within the releant tabs can help you to locate whether your question has already been answered here.
Do I need my own PI Insurance if I’m working for someone else?
No, your employer's insurance should cover the work you're employed to do for them. However, it may be a good idea to double-check with your employer or review your employment contract to confirm this. If you are undertaking any private work though, you must have your own insurance in place.
Who do I speak to if I have a potential claim?
Contact the Broker to notify of any possible issue.
This is also a great article on when to notify your insurer.
I received a letter from the client threating legal action, what’s the next step?
This is dependent on individual circumstances and there are various scenarios that will need to be referred to the insurer to review. Please contact the Brokers to discuss.
This is also a great article on when to notify your insurer.
I am an existing member with insurance and starting up a new practice. Can both of these practices be covered under one policy?
Contact your Broker.
This is dependent on individual circumstances and there are various scenarios that will need to be referred to the insurer for review. Please contact the Brokers to discuss.
The new practice may be covered on the condition that the new practice does not bring with it any material changes, specifically:
- Is the practice incorporated?
- What is the date that the practice was established?
- Are there any new directors coming into the business?
- Are there any changes to professional services or activities?
- Does this practice bring with it an increase in professional fee income?
- Are there any claims or circumstances that may lead to a claim against the business?
A No Claims Declaration noting the new entity will need to be signed and dated. Depending on the above responses there may be a need to insure the new practice under a separate policy.
There is an owner occupier/architect contract issue with the builder. What do I do?
Contact the Brokers. This may be an issue that requires notification of circumstance to the insurer, which the Brokers can handle for you.
Can two independent Architects work together on a new project? Do they need another PI policy?
This depends on how the architects structure their collaboration. If both architects are being engaged by the client under their individual contracts then they will both have cover under their respective insurances.
Professional indemnity will also respond if one architect engages another as a subcontractor.
If the collaboration is being set up via an incorporated Joint Venture, it is recommended that they seek to cover this entity under a separate policy. Please contact the Brokers to discuss.
What are the legalities/insurance issues involved in releasing CAD files? The client wants them so they can make alterations.
ArchiTeam recommends you have a clause in your agreement with the Client outlining the ownership of the CAD files and drawings. ArchiTeam now provides all current members with the CAD Disclaimer, as part of the Client Architect Agreement pack.
The following article will provide further examples of this situation WCPGW – PARTIAL SERVICES & RELEASING CAD FILES
I’m looking to transition from being a sole trader to a company, will this change or affect my insurance?
No, the insurance policy is still in the name of the noted Directors of the business and thus will not affect your insurance.
However, we will need to update our records to reflect this change. Please contact ArchiTeam Cooperative to update your new business structure, and your Certificate of Currency will be updated by the brokers after a few questions are answered. Email the office here
Does the group policy still cover me if I am designing my own house?
No, it does not.
Am I insured for documenting my own home / property?
Professional Indemnity insurance is designed to cover the architect for allegations, or otherwise, of a liability for a financial loss or damages, resulting from the insured’s professional duty as an architect to a third party.
There are two exclusions in the policy that makes the intention of cover clear:
We shall have no liability under this policy, including in respect of any claim or cost or expense or indemnity or payment or loss, arising out of, based upon, attributable to or in consequence of:
any claim made by or on behalf of:
- (a) any insured person or entity; or
- (b) any parent, successor or assign of any insured person or entity, or
- (c) any entity in which an insured person or entity or the management of the insured or subsidiary has an executive or controlling interest, or
- (d) any officer or employee unless such claim is made by or on behalf of an officer or employee as a customer or client of yours.
We shall have no liability under this policy, including in respect of any claim or cost or expense or indemnity or payment or loss, arising out of, based upon, attributable to or in consequence of:
- …(d) your activities as a property developer.
Professional indemnity cannot cover first party claims or claims relating to the sale of property. If an architect is documenting their own home, then the only way a policy may protect them is if a new owner alleges design issues caused them a financial loss.
Having said that, it is difficult to see how the policy will trigger, if the architect was not engaged to design a home or building for an independent third party.
What does aggregate mean?
An aggregate for insurance is the maximum amount of money an insurer will pay out for claims during the policy period. You can find details of what this amount is within the ArchiTeam Cooperative Master Policy here.
A client wants to reduce the services agreed to in the CAA because they want to cut costs. What do I do?
These are two great articles that could assist you.
WCPGW – SHOULD YOU TRUST YOUR CLIENT?
WCPGW – PARTIAL SERVICES & RELEASING CAD FILES
How long do I need run-off insurance for after I’ve ceased practicing?
If you are considering ceasing your practice, it is crucial to ensure that you have run-off insurance in place to protect yourself in case a claim arises. It is highly recommended that ArchiTeam members purchase run-off insurance for a period of 10 years.
The Victorian Building Act holds registered Architects' liability to 10 years after the expiry of a project. Most States have a statute of limitation that holds you liable for decisions made up to 6-7 years after a project is completed. There is no definite answer as we have seen some design consultants involved in litigation in respect of work that was past the 10 year period.
If you are confident that you have no exposure to liabilities or claims from your work in the last 10 years, then you may allow the insurance to lapse. However, we strongly advise you to be 100% certain that there is no possibility of a claim being brought against you for this work. Otherwise, you may have to fund your own defense if a claim arises in the future.
If you would like to apply for run-off insurance, please complete the run-off application available at this link: https://architeam.abcountrywide.com/architeam-runoff-insurance. Please note that you must be an ArchiTeam member for a minimum of 1 year to qualify for run-off insurance.
Am I covered for Project Management Services?
You are covered for Project Management services in addition to architectural services, however, please ensure it is noted in the Client Architect Agreement that you have been engaged for Architectural AND Project Management services – make sure it is part of your contractual arrangement.
Am I covered for providing estimates of probable cost?
When it comes to cost estimates:
- Architects are not qualified to provide cost estimates;
- Architects should always recommend a QS to cost a concept design;
- Architects should always aim to arrange a Builders quote OR get the client to engage a QS
- If you have given an estimate of probable cost this should be accompanied with a clear disclaimer - The Client Architect Agreement states the client engages a cost consultant at their own expense. The Architect is not liable for cost estimates.
You are covered for ‘estimates of probable cost’ but use disclaimers and always recommend an independent professional to do the cost estimating.
For further reading WCPGW – PROJECT BUDGETS AND COSTINGS
Can you give examples of any claims which have been denied by the PI Insurer?
In the last 10 years ArchiTeam members have notified to the Insurer over 260 circumstances which may lead to a claim and the insurer has only declined 4 claims. One of those was covered by another insurance policy, which makes for a decline rate of 1% of all circumstances notified. Claims denials are very rare.
Examples of denied claims:
- The policy does not cover you for pre-purchase inspections. Why? It’s a highly litigious area; architects operating in this area need to buy a separate PI insurance policy for this specific activity.
- Acting as a Builder – a claim was denied where the Architect was acting as a registered builder and had quoted on the job as the builder. The ArchiTeam PI policy only covers you acting as an Architect. If you register as a Builder and are acting in this capacity these activities are not covered and you will need to seek cover outside of the ArchiTeam Insurance policy.
- Known Circumstance – a claim was denied because an Architect was fully aware of a claim for compensation against them which was notified to them before joining the ArchiTeam PI Insurance program. Once the writ arrived and the Insurer investigated the claim, it was then revealed the complaint had originated well before the member joined the ArchiTeam PI policy. A letter of demand for compensation had been made before the current policy so the Insurer denied the claim on the basis it was a Known Circumstance and should have been notified to the former Insurer when the letter of demand was made.
This claim denial is a great example of why it is so important to notify the Insurer as soon as you are aware of a complaint which may develop into a demand for financial compensation. It is essential to notify all circumstances to lock in the cover if the dispute escalates into a legal dispute down the track.
Further reading;
What are some examples of scenarios where it’s best to contact your insurer to avoid a claim down the track?
Written demand for compensation, any writs/legal letters OR a complaint not getting resolved and it will cost the client money to fix the problem – notify!
Please contact the Brokers to discuss.
Can you please give us some examples of claims against an Architect in small practice?
A few examples we have seen of claims made against Architects are:
- Alleged breach of copyright;
- Alleged use of Aluminium Composite Panelling which was not compliant at the time;
- Architect also acting in a Project Management role appointed sub-consultants and got caught up in an action due to a negligence design by an engineer who was a sub-consultant.
- A fee dispute (not covered) which then turned into allegations of cost overruns and building and design defects which were blamed on the Architect
Is there a time limit for a client to make a claim against an architect?
The Victorian Building Act holds registered Architects liability to 10 years after the expiry of a project. Most States have a statute of limitation which is six years after a project is completed. There is no definite answer as we have seen some design consultants involved in litigation in respect of work that was past the 10 year period.
When does a notification become a claim?
Once the initial notification of a circumstance turns into a written demand for financial compensation or a writ / legal documentation claiming compensation, then the Insurer treats the matter as becoming a formal claim.
Is a Refund of Fees requested by my client covered by my PI Insurance?
A PI insurance policy provides cover where it is alleged you have caused a financial loss to a third party. It will pay to defend an action (and where there is some liability pay damages) for losses caused by the provision of your professional services as an Architect.
The policy will not pay for a refund of fees. This is not a demand for financial compensation where your negligent services have caused the client a financial loss.
We often see a PI insurance claim start with a demand for the refund of fees (which is not covered - often the Architect refuses to refund the fees because they have done the work). This can then escalate into the client making further demands for financial compensation for alleged losses. These demands for compensation are covered by the PI insurance policy and then cover is provided by the policy to protect the Architect against these demands.
What are some other areas where my PI insurance does not provide cover?
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The policy does not cover claims arising from external wall cladding that is not compliant with applicable building standards in respect of fire resistance. There is some cover for legal defence costs against these allegations, however, no cover for compensation paid due to the use of non-compliant cladding.
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Asbestos – claims arising from the use of asbestos
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Assumed Duty or obligation – signing up to a contract which has obligations that go well beyond the normal legal obligations that an Architect would have to a client. If you are using the Architeam Client Architect Agreement or are singing an unaltered Australian Standards Contract - you do not need to be concerned about this exclusion. If you are singing up to a manuscript contract developed by the client we encourage you to obtain independent legal advice before signing manuscript contracts.
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No cover for actual workmanship – actual construction performed by you (like a builder or other trade would perform).
When do I inform the insurer of a change of billable work?
At the time of renewal – annually you will complete a PI insurance proposal form and update the annual revenue details. You can use either end of financial year figures or calendar year figures as long as it is consistent from year to year.
When doing work for free (for family, etc) do we still need to have a signed client architect agreement?
It is always recommended to have a written agreement in place for any project regardless of it being pro-bono or paid. This may be a regulatory requirement; the insurer may take a dim view of architects not following due process, which could translate into harsher insurance terms being imposed on the architect.
Are you liable for recommending consultants to clients that don’t perform?
It is common for Architects to refer clients to other consultants. You will always be better protected against any liability if you do not directly engage the consultant on behalf of the client and ensure the client directly engages the other consultants.
Working in association with another architect: How is insurance responsibility apportioned, say if one architect contracts to another, who would be considered the primary consultant with a direct relationship with the client? And If we collaborate with another architect or interior designer, how should we manage the CAA?
The policy automatically extends cover to sub-agents/consultants acting for and on behalf of the Architect. If two Architects collaborate on a project both Architects need to ensure they have maintained their own PI insurance and the Insurers will sort out how to approach a claim in the event one or both are sued in relation to the job where both contributed towards the Architectural services.
The Big 4 Banks are requesting clients obtain a letter or report from their architect stating that our documents comply with all codes and standards etc. If our clients' lending is dependent on this how should we respond?
This falls back to what an architect is qualified to provide as a service? We do not recommend signing any certification document with respect to a project fully complying with the Building Act and all regulations. This is not within the role and responsibility of an Architect and many aspects of such a role would fall within the domain of a Building Surveyor. It is important Architects only sign off on work which falls within the scope of their own professional services. You need to be very careful with regard to statements you are signing off; that they only relate to the delivery of your scope of services.
Further reading
Does the Insurance cover all Building Types?
Yes.
Are we covered if living overseas for a period of time but only running Australian jobs?
You would need to notify your Insurer (via Austbrokers Countrywide) of your circumstances to see if cover will still be granted. Most insurers have issues with covering professionals that do not reside in Australia so it would depend on the period being spent overseas and the type of work being done.
How long before I can dispose of records from old projects?
We recommend all Architects retain records for a minimum of 10 years, however, please refer to state legislation and other relevant codes and regulations to ensure you are compliant with regulatory requirements.
Are we covered for performing work for Family members?
No, not for immediate family. A typical exclusion found in PI insurance policies is as follows:
There is no cover for:
Associated persons or entities
any claim made by or on behalf of:
- any insured person or entity; or
- any parent, successor or assign of any insured person or entity, or
- any entity in which an insured person or entity or the management of the insured or subsidiary has an executive or controlling interest, or
- any officer or employee unless such claim is made by or on behalf of an officer or employee as a customer or client of yours.
What membership benefits are there?
Our mission is to empower and support small practice architects to thrive. In addition to our great value insurance policies, our members enjoy access to our free awards program and online member forum, discounts on CPD events, CPD Online, and affordable business documents, and access to our networking and peer support programs. We also have member offers, such as the Carbon Neutral offer from Pangolin.
Here is an article interviewing a few ArchiTeam members about the benefits of membership too: Making the most of membership – ArchiTeam - Australian Design Review.
How long does my membership and insurance application take to be processed
Between 1-3 business days depending on your application. If
Can I apply for insurance to finalise my registration?
Yes, this is a common occurrence where new architects require insurance to become registered and hence, will not have a registration number. As soon as you receive your registration number, please contact the office and provide this to us as the insurance is only available to Registered Architects.
Can I change my projected practice turnover
Yes, if your projected turnover changes part way, please contact the office. If you do not notify of known changes to your projected turnover, your insurance coverage could be affected. Depending on the amount, your insurance premium may change.
Do I need to be present for the client/witness signature?
No, and the signatures can also be electronic.
Does a fee agreement need to be agreed/approved by ArchiTeam
No, it does not.
Does ArchiTeam have access to the Australian Standards?
ArchiTeam currently doesn't have access to the Australian Standards - even after many years of conversations etc.
But we are in discussions with another group who does have access, and we are hoping to negotiate a deal through them shortly.
What is the eligibility required to become an ArchiTeam Member / Insurance Member?
Eligibility for Ordinary Membership
The following people are eligible for Ordinary Membership:
- Registered Architect;
- Graduate Architect registered with the relevant building authority;
- Any other categories of persons as deemed appropriate by the Board (such as non-registered architects, students and those in complimentary professions who will be able to actively contribute to the co-operative).
Eligibility for Insurance Membership
The following people are eligible for Insurance Membership:
- Registered Architect;
- Graduate Architect registered with the relevant building authority;
- Registered practitioner in an allied profession (e.g. interior designer).
Why do I need to provide a CV to join as a member?
This documentation is required in support of your membership and insurance application to ensure that all shareholders of the co-operative are appropriately assessed. By joining ArchiTeam, you are also purchasing a share within the co-operative and hence need to demonstrate eligibility as a shareholder. Your CV does not need to be formatted as only the contents will be reviewed.
I would like a copy of the ArchiTeam CAA. How do I get one?
Thank you for your interest in the ArchiTeam CAA. Please note that it is only available to current ArchiTeam Members. If you are not an ArchiTeam Member, you find out how to join via this link.
If you are a member, please contact the ArchiTeam office with your name and member number. If you are reaching out on behalf of a director, please note the name listed under the ArchiTeam membership.
Can I make changes to the ArchiTeam CAA?
Any changes to the CAA should be done with caution and be independently reviewed by a lawyer at the members expense. Any Clauses that are not applicable to your proposed services, can be crossed out.
Is there a Word .docx version of the CAA I can use to make edits?
No, the CAA is only available in PDF format. However, here are a few free resources you can use to edit PDF documents:
Any Clauses that are not applicable to your proposed services, can be crossed out.
Please note that ArchiTeam is not affiliated with the above links and to use with your own discretion.
Can I remove the ArchiTeam logo and branding from the CAA?
ArchiTeam have branded this document to indicate that it is a professional agreement that has been developed alongside Holding Redlich Lawyers. We do not recommend that the ArchiTeam logo be removed. The Cover page can be removed, and your practice can insert your own with your own branding if you wish.
Can I modify the Terms & Conditions?
It is recommended that the Agreement Terms & Conditions are NOT edited. If any changes are made to the Terms and Conditions you must have the CAA independently reviewed by a lawyer, at your own expense.
Disclaimer: The original form of the terms and conditions set out in this document have been prepared by ArchiTeam Cooperative Ltd in collaboration with Holding Redlich Lawyers. Neither ArchiTeam nor Holding Redlich are party to, or take any responsibility for, the form of this agreement entered into by the parties.
Can I use the CAA in other states?
The CAA is applicable in all Australian States and Territories. Note that the other States and Territories do not need to be listed, as the Architects Acts for those States do not require any additional inclusions.
A client wants to reduce the services agreed to in the CAA because they want to cut costs. What do I do?
You are not alone! Have a read of this great article written as part of our "What Could Possibly Go Wrong" series.