The primary responsibility of an architect on a construction project is the design of the project. They are expected to deliver designs that are as error-free as possible, in order to ensure that the structure that will be built using them is reasonably safe for people to live and work in. However, even the best architect would tell you that mistakes can sometimes inadvertently creep in despite their hard work and best intentions. And these errors may have serious, if not catastrophic, consequences later on when the structure has already been completed. If this happens, then the architect will be liable for monetary damages arising from the mistakes he has made, as well as any acts of omission or negligence he may have committed while working on the designs. This is why they need to buy professional liability insurance for architects.
Professional liability insurance for architects is also known as malpractice insurance or errors and omissions insurance. The policy would pay for your legal defense as well as any monetary damages you may be required to pay subject to the policy limits. However, only projects that were completed while your current policy is in force would be covered. If you are sued for a project completed before you bought this policy, you could not make a claim for it. Policy deductibles apply to each individual claim. These policies are typically renewable on a yearly basis and coverage continues as long as the policy remains in force. Thus, if you bought your malpractice policy in 2000 and kept it current, you could make a claim if you were sued for a project that you completed in 2001.
Small firms that are covered by professional liability insurance for architects are usually more favored by clients since being insured is seen as a sign that they are financially responsible and are able to reimburse the owner for losses if ever a project develops problems later and they are sued for damages. Professional liability insurance is also seen as an indicator that the firm has adopted a responsible risk management strategy, since they are transferring some of their risk to an insurance carrier.