Written by William Paull
Co-Founder & Account Director
On this page
- Key points
- Do architects need professional indemnity insurance in Queensland?
- How much professional indemnity insurance does an architect need in Victoria?
- Do architects need professional indemnity insurance in New South Wales?
- Does the duty sit on the architect or on the practice?
- How much professional indemnity insurance should an architect carry?
- Want your cover checked against your state's rule?
- Frequently asked questions
Key points
- Queensland, Victoria and New South Wales all require a practising architect to carry professional indemnity, each by a different instrument.
- Of the three instruments, only Victoria's January 2020 ministerial order sets a dollar figure.
- In Queensland the duty is not a precondition of registration or renewal.
- In Victoria and New South Wales the duty sits on you, the individual architect.
- Two quotes at the same headline limit are not the same if one has to pay its defence costs out of the limit.
Do architects need professional indemnity insurance in Queensland?
Yes. But you won't find it in the Act. The Architects Act 2002 is silent on insurance. The duty lives in paragraph 36(a) of the Board of Architects of Queensland Code of Practice, a statutory instrument approved by regulation.
The Code says you must "take all reasonable steps to procure and maintain" cover appropriate to the services you provide. That makes it a qualified duty, with two carve-outs:
- Your employer's cover. The person engaged to provide the services, such as your employer, has complied, and that cover extends to you.
- Cover you cannot get. Cover is unavailable or would be economically unviable, and you tell the client so in writing before the agreement.
Outside those two, you have to carry it. But it is not a condition of registration or renewal, and there is no minimum sum. It is enforced by audit and discipline, not by an offence.
How much professional indemnity insurance does an architect need in Victoria?
Victoria does it the opposite way, with an offence and a number. The Architects Act 1991 makes it an offence to carry out work as an architect without the required insurance.
The amount is set by the Architects Insurance Ministerial Order made in January 2020. It sets the minimum two ways:
- Defence costs inside the limit. Not less than $1.2 million for any one claim and in the aggregate.
- Defence costs outside the limit. Not less than $1 million, plus a further amount for costs, being the greater of $200,000 or 20 per cent of the limit.
The policy must also give at least one automatic reinstatement of the limit. Every architect required to be covered has to give the Board written proof each financial year.
Do architects need professional indemnity insurance in New South Wales?
Yes. The duty sits in a code, and the code sets no dollar figure. The Architects Act 2003 imposes no duty of its own. The obligation is clause 15 of the Code of Professional Conduct scheduled to the Architects Regulation 2017. It requires a policy "appropriate for the architectural services being provided".
You also have to tell the client about the cover you hold for their work. Enforcement is removal from the Register and disciplinary action, not a criminal penalty.
Does the duty sit on the architect or on the practice?
In Victoria and New South Wales, on you, the individual architect. How the practice's policy fits in depends on the state.
- Victoria. The duty is on the individual registered architect rather than only on firms. The policy itself can be written in the name of the practice, provided you are covered by it. An employee architect is covered through the practice's policy.
- New South Wales. The duty binds the individual practising architect, not the architect corporation or firm. It switches off for an architect who works only as an employee of the person engaged.
- Queensland. The Code's carve-out covers an architect whose employer, as the person engaged to provide the services, has complied.
Those carve-outs are written for employees. Leave a practice to work on your own account, and they no longer describe you.
How much professional indemnity insurance should an architect carry?
The Queensland and New South Wales codes set no dollar figure. In both, the test is cover appropriate to the services you provide. So the limit is a judgement about your work, not a number someone hands you.
Before you settle on a number, check whether the limit has to pay its own defence costs. Some policies pay them out of the limit. Others pay them on top. Victoria's Order sets its minimum both ways.
If the practice has taken on design and construct work, check how the wording defines your professional business. How a design and construction wording differs is on professional indemnity for engineers, architects and design professionals.
Architects commonly need public liability as well. How the two covers split is in public liability and professional indemnity: do you need both?
What we check: Whether your limit pays its own defence costs, whose name the policy is in, and whether both fit the rule in your state.
Want your cover checked against your state's rule?
Tell us where you practise and what you hold now. We will read your policy against the rule that applies to you.
Frequently asked questions
Do employed architects need their own professional indemnity insurance?
Usually not, while you are only an employee. At Consolidated Insurance Brokers, we look at where that line falls before you go out on your own. In Victoria an employee architect is covered through the practice's policy. In New South Wales the duty switches off for an architect working only as an employee of the person engaged. In Queensland the Code carves out an architect whose employer has complied.
Is professional indemnity a condition of architect registration?
It depends on the state. At Consolidated Insurance Brokers, we read your state's rule, then your policy. In Queensland the duty sits in the Board's Code of Practice and is not a precondition of registration or renewal. In Victoria working uninsured is an offence, and you give the Board written proof each financial year. In New South Wales the duty is enforced by removal from the Register and discipline.
Do defence costs come out of an architect's professional indemnity limit?
On some policies they do; others pay them on top of the limit. When Consolidated Insurance Brokers reviews your cover, we check which way yours works. Victoria's Architects Insurance Ministerial Order made in January 2020 accepts either: at least $1.2 million with defence costs included, or at least $1 million plus the greater of $200,000 or 20 per cent of the limit for costs.
Can Consolidated Insurance Brokers check my professional indemnity against my state's architect rules?
Yes. Consolidated Insurance Brokers reads your schedule against the rule in Queensland, Victoria or New South Wales. We check whether the limit meets Victoria's January 2020 Order where it applies, whether defence costs sit inside the limit or on top, and whether the policy names you or the practice.