Since the Building Safety Act (BSA) was introduced in October 2023, architects have faced increasing pressure from new regulations, particularly regarding their professional indemnity (PI) coverage. With the creation of the Building Safety Regulator (BSR) and the Gateway process, the volume of documentation required for project approvals has soared. As delays become more frequent due to BSR backlogs, projects risk overrunning and architects may face greater exposure to claims if clients are impacted by these delays. Architects should ensure that any advice given, especially regarding delays, is documented thoroughly to protect themselves from potential negligence claims.
Principal Designer Role and Liability Exposure
The Principal Designer (PD) role under the BSA has also expanded, with increased responsibilities for ensuring compliance with safety regulations. This role is critical in reducing liability for architects, but it also opens up new risks. As the PD is now tasked with coordinating and overseeing the design team, architects may find themselves in a position where disputes arise with other professionals over compliance. These disputes can lead to delays and additional costs for clients, increasing the likelihood of PII claims. Architects need to ensure they have the resources and expertise to manage these expanded duties, including securing written confirmation of compliance from all design team members.
Increasing Risk of Claims Due to Delays and Regulatory Scrutiny
The growing regulatory scrutiny under the BSA, particularly through the Gateway process, poses a significant risk to architects’ PII. Approval delays, which can last weeks or even months, are becoming more common due to high volumes of applications and a lack of resources within the BSR. As projects face delays, contractors may face penalties and clients may look to recover costs through professional negligence claims. Architects should be proactive in advising clients about potential delays caused by regulatory requirements and ensure that their PII policies provide adequate coverage for such delays.
The Remedial Acceleration Plan and Architect Liability
In addition to regulatory changes, the government’s Remedial Acceleration Plan (RAP) to address unsafe cladding has further exposed architects to claims risk. As landlords face penalties for non-compliance with RAP deadlines, they may seek to recover remediation costs from architects and other project professionals. Given the mandatory nature of PII for architects, they are often the last insured party and thus the primary target for recovery claims. Architects should retain all relevant project documentation and ensure their PII coverage is robust enough to defend against these potential claims, particularly those arising from the remediation of unsafe cladding.
Economic Pressures and Insolvencies in the Construction Sector
Economic challenges such as inflation and rising material costs are contributing to financial instability within the construction industry. Increased costs often lead to cost-cutting measures, placing more pressure on architects. Additionally, the ongoing risk of insolvencies among contractors raises the likelihood of architects being left “holding the bag” for unpaid fees or uncompleted work. This can lead to claims of negligence or failure to meet project specifications. Architects should mitigate these risks by thoroughly vetting clients’ financial stability and ensuring that contracts include provisions for recovering unpaid fees.
The Growing Cyber Risk and Professional Indemnity Insurance
With the rise of cyber threats and AI use in design, architects face an evolving risk landscape that could lead to new types of PII claims. Cyber-attacks can disrupt operations, leading to missed deadlines or errors in design. As architects increasingly rely on digital tools and AI in project management and design, there is a growing risk of over-reliance on technology, leading to mistakes that could result in professional negligence claims. Architects must ensure their PII policies are up-to-date to cover cyber-related risks and incorporate provisions for AI use in their contracts.
Conclusion
The architectural profession is facing an evolving set of challenges, with new regulations under the Building Safety Act, increased scrutiny from the Building Safety Regulator and the introduction of the Principal Designer role. Architects must adapt to these changes to reduce the risk of professional indemnity insurance claims. By implementing strong risk management practices, maintaining comprehensive documentation and ensuring their PII policies adequately cover emerging risks such as delays, disputes and cyber threats, architects can better protect themselves against claims in an increasingly complex regulatory environment.
