The current worry for the profession is that the PI insurance market for architects is not particularly large and it appears that insurers are taking the view that whilst they don’t want to exclude architects entirely, they are worried that some aspects of architectural practice are too risky to be profitable. The problem is that some of the areas that underwriters are trying to side step are actually fundamental to most architects’ practice. In a recent case, an architect was told that PI insurance that to cover a basement swimming pool would require re-issuing cover with different underwriters at 3 times the annual premium. This borders on unaffordable and could never be considered proportionate to the overall extra risk.

The first exclusions appeared decades ago. They tended to be for contamination especially from asbestos. This was understandable, as the disease and deaths caused by asbestos could result in huge disproportionate claims. There was a way around this in that architects could simply not get involved in looking for asbestos and tell their clients that they had to hire specialist surveyors when contamination might be present on a site.

Next, came a list of deleterious materials. In typical fashion of dealing with the barn door after the horse had bolted, client lawyers and insurers began to list deleterious materials that could not be specified because they had caused claims. Again this was fairly simple to accommodate as most of the materials, with a few silly exceptions, were generally banned from building projects. This included stuff like high alumina cement or straw board that was well known to deteriorate dangerously and which only pretty ignorant consultants would continue to specify.

Around the turn of the current century, a bunch of public swimming pools had to be radically re-built because the architects and their engineers who designed them were simply unaware of the problems caused by interior humidity. A warm enclosed swimming pool evaporates huge amounts of humidity into the contained air. Pre-war indoor pools were usually masonry and concrete structures covered with tiles to withstand this.

After the war, engineers tended to use steel for structure with double glazing that was well sealed to stop all natural ventilation. Humidity would rise from the warm swimming water and condense in out of the way places where there might be cold bridges through the steel structures. The pool buildings deteriorated prematurely and often needed to be demolished. Their architects suffered claims so insurers said they would not cover swimming pools at all. This is a serious problem as anyone who designs houses for the wealthy might be asked to include a pool. If designed with proper materials, insulation and ventilation there need be no problem ever, but the profession was tarred with the same brush and most PI policies try to exclude swimming pools.

If you are a practice that does these routinely, you probably know how to design away the common risks but it can also greatly reduce your market for insurance. Otherwise, architects commonly recommend specialist design build subcontractors to build pools that would include installing the correct insulation and ventilation and the specialist’s insurance would cover the pool design.

Even more absurd, was an exclusion that has appeared in the last decade or so for basements. Especially in high value urban areas, the wealthy increase their home values by adding further levels underground. Adding space below existing buildings is difficult. They are rarely accessible without mechanical diggers and the lower floors are often supported by the earth. Holding the building up when removing a further floor level worth of soil is a laborious process of underpinning and hand excavation. You can sometimes see conveyor belts taking shovels full of soil up to dump out into a street level skip. The excavation for confined sites can literally take years. When that is finished, the basement must be made damp resistant. One can only assume that there must be too many failures in basement construction for insurers to be comfortable so when it comes time to renew. Many now propose a blanket ban on basements. Of course, only very small firms would regularly design buildings with no basement levels. Most new builds of any scale have them. This exclusion affects a large preponderance of firms and if it is retrospective, it is impossible to accept. Any basement previously designed and built would be excluded and a claim would have to be paid for out of the firm’s cash flow thus negating the purpose of insurance. What insurers don’t understand is that the part of basements designed in detail by architects is not the bit that generates claims. Architects concentrate on space use, finishes and access, rather than structure and waterproofing. These latter aspects are specified almost invariably by consultant structural engineers trained for such technicalities. Such participation could be required by policies to reduce architect risk accordingly.

Exclusions get still worse. Around the time of the basement exclusions, ‘high rise’ buildings appeared on the exclusion list. High rise is usually defined as over 18m and has its own extra building regulations, in particular for fire proofing, structure and means of escape. The problem is that an 18m high building is not really very high. It is 6 stories or the common maximum height for a traditional walk up building. Cities are full of these built over the centuries for which renovation is bread and butter to the profession. What the public think of as high rise is the next threshold which is 30m or about 10 levels. These are usually post war buildings with lifts.

The problem is that these are all very common building types so to exclude them, excludes a large proportion of the profession which is unreasonable, as there are firms that do this scale of buildings all the time with expert consultant teams and without incident. Mid and large size practices would end up unable to insure their most usual type of work. Again, what underwriters need to understand is that the larger firms that do high rise buildings usually with basements work with client appointed consultants not only for Structure and Services but also for fire safety and building regulations. For this reason, the architect routinely avoids the kind of direct liability they are concerned with. For this type of tall building risk, policies could be couched in words requiring practices to insist that clients hire suitable fire safety consultants with their own PII to advise.

The most egregious new exclusion is for “cladding” that has come following the Grenfell disaster. What insurers should be saying is they will not cover flammable “rain screen” cladding which is what burned at Grenfell. Wrapping the exterior of a building with insulation is the most effective way to conserve energy. Rainscreen cladding is a cosmetic layer used to hide the insulation that would otherwise be unacceptably ugly. There is often a gap between the uneven insulation and the covering that is supposed to look flat and sharp. If both insulation and rainscreen are flammable, the gap can act as a chimney.

That is what happened with the Grenfell horror. Buildings all over the UK used the Grenfell system and they are now being replaced at great expense to insurers, landlords and unfortunately residents. Unfairly, however, the term cladding can also mean single layer brick with cavity that is a traditional and perfectly safe way of surfacing the elevation. Suffice to say that all buildings have exterior elevations with surfaces that could loosely be described as cladding so to exclude all projects with cladding will again render PI insurance useless. The distinction as to which types of cladding carry risk could be specified as they do with deleterious materials rather than a blanket ban on cladding cover.

The most draconian exclusion is fire safety. It is a fundamental job of an architect to identify where there might be danger from fire in a building. Most fire danger is minimised by following the many building regulations for flammability of the structure and contents as well as means of escape if there should be a fire. If insurance was void when a building catches fire, then the architect could be held liable for all the material expenses and people’s lives damaged or destroyed by a building fire. Almost any building can catch fire, so to void insurance for building fires would disqualify almost every architectural practice.

Although clients are supposed to insure their buildings for restoration in case of fire, that insurance does not usually include contingent losses from injury and the like. Also, if they detect design negligence as a contributing factor to a fire, the insurance company further proceed against the architect for fire damage. Another problem with fire is that it is impractical to expect all architects to consult a building inspector or fire engineer at the first stages of design. Until the client has received planning they are quite reasonably loathe to take on the premature expense of building control. Architects are quite capable of assessing means of escape at the planning stage and indeed should be covered for giving fire advice on extensions and smaller projects so to exclude fire completely is an unreasonable stance for insurers and government should consider whether they should be allowed to as long as the ARB says PII is compulsory.

A problem here concerns the legal profession. When there is a claim to be made, client’s lawyers advise them to throw a big net over the entire building team. They are loathe to omit anyone on the basis that everyone on the team may be found to bear some aspect of liability, however small, and others may not have sufficient insurance. Thus some insured member of the team ends up carrying the burden of the damage.

If an architect was to pass the waterproofing design of a basement, for example, onto the structural engineer in the normal fashion and that basement later shows damp, the client’s lawyer will advise him not to worry about whose responsibility it is but to simply sue the architect, structural engineer, services engineer and contractor all together. Eventually as more evidence is obtained, it may become obvious whose fault it is and the claimant will drop the pursuit of some more distant members of the team.

In the meantime, the team members who were not involved in the design have nevertheless made a claim on their PI insurance and their insurers have had to pay for lawyers to defend them as far as the claim against them ran. This will appear as a paid out claim even if they were found to have no fault. In some cases, a designer, who had really nothing to do with the problem has had to defend themselves all the way through at trial and the judge may find they had some trivial participation in causing the problem like introducing the specialist who did cause the problem.

Multiple defendant lawsuits are extremely inefficient in that every defendant team member has to get “lawyered up” individually and a huge number of solicitors and barristers duplicate each others work defending the many members of the building team caught in the net. The legal costs can often grow larger than the eventual cost of rectifying the problem and losing claimants still only pay a portion of the costs of resisting the suit. One suspects that far and away the lion’s share of PI claims paid out each year are for legal defence fees rather than for actual damages. Lawyers should be required to “triage” their claims with respect to the building team. There should be defined consequences for frivolously including remote members of the team with little or no potential to have caused the problem.

To some extent this can be alleviated through Net Contribution Clauses in Appointments that say that the consultant will not have to pay out more than his portion of the liability for the damage within the team. These are strongly resisted by client lawyers who are understandably looking for a way to get their clients reimbursed by whoever is solvent and insured regardless of who is to blame.

The way to alleviating insurers concerns in this burgeoning environment of exclusions is to find a way to pass off the responsibility for these difficult categories of building onto specialists who have specific training and experience to handle them. Structural engineers must be instructed for basements, especially retrofit ones. Cladding designers must be engaged for rainscreen type elevations. Fire safety engineers should be commonly hired to work out compliance with means of escape regulations. If architects undertake to always advise their clients to hire such specialists whenever relevant, then the insurers should feel much more confidant about covering the architect’s risk. Of course, these specialists are now finding it difficult to get insurance for themselves.

One way to avoid the draconian all encompassing net is through individual project insurance which will pay out for a fault regardless of who may have caused it usually for a period of 10 years from completion. This protects the claimant and gets them paid quickly but a claim can still be launched by the project insurers against team members who those project insurers deem liable.

Policy Exclusions represent a clear danger to practice and of course to the public if practices cannot pay out when found to be negligent. This will continue to be a factor in some unavoidable categories. They can be modified through negotiation of policy wording or by government intervention as in the case of vehicle insurance where policies have to cover certain aspects and categories for the protection of the public.

Alfred Munkenbeck of Munkenbeck and Partners is a member of RIBA and ACA Councils