NZACS has been the major player and market leader in Professional Indemnity Insurance for NZ architects since 1972. It was founded as a co-operative by architects for architects to provide professional indemnity cover tailored to the profession, achieve cost-effectiveness through group buying power and to provide education and risk management support.

We are unique in providing a Claims Committee of experienced architects to guide and liaise with members, insurers and legal teams on technical and professional matters. Our newsletter Communique updates members on current issues in risk management and we have consistently been ahead of the pack in evolving policy terms to meet them.

We maintain an ongoing relationship with the NZIA and support tertiary education in professional studies.

We value the ethos of the co-operative to share experience across all members and to maintain a governing board of experienced architects, representing the geographic and demographic spread of membership, assisted by insurance brokers and accountants with specific expertise in professional risk management.

Bankruptcy is perhaps the greatest commercial risk that an architect can face. Typically, it may preclude an architect from managing a business in the short term and they may carry the stigma of being an undischarged bankrupt. Equally, your potential client may not want to proceed with you on their projects if there was no prospect of recovering their financial losses from you if you made a mistake. Separation of your business risks from your personal and family responsibilities can sometimes be difficult.

Professional Indemnity Insurance can assist in overcoming these problems.

Risk management is the process of identifying, assessing, responding to and controlling risks. In architecture, prudent risk management includes taking out Professional Indemnity Insurance.

There is currently a membership cost of $10, plus a joining fee of $40.

Architects in providing architectural services or advice, owe a contractual duty of care to their clients and a common law tortious duty of care to others who might be entitled to rely upon that service, advice or opinion. This duty of care is also imposed by statute (Consumer Guarantees Act) and the Registered Architects Rules of ethical conduct. It is also a contractual condition in the NZIA Agreement for Architects Services.

This is a commercial judgement decision which will be influenced by the size of your practice, number of staff, type and size of project, client profile and any contract requirements. Indemnity limits begin at $250,000 and go up from there. Some firms have $20m indemnity. Policy limits can be discussed as part of the quotation process.

For as long as you are in architectural practice, professional indemnity insurance should be maintained.Once you cease practice you will need to need to consider continuing with a “run-off “PI Insurance policy. This can extend your previous cover, but with an ever-reducing annual premium which recognises your lessened risk exposure.

Yes; Professional Indemnity Insurance would still be required. If you are an NZIA member you are eligible to apply for the NZACS insurance cover in your name. It won’t include your employer, but it will provide cover to you and any legal liability that you may have in your role as the architect.

Risk exposure is not diminished by small projects. There is no direct relationship between the size of the project and the risk exposure. Small projects are often residential in nature and therefore covered by the Consumer Guarantees Act and the Fair Trading Act which prohibits any attempt to impose a contractual limit of liability. Projects which involve a limited architectural service or a truncated construction observation role, are known to present a higher risk profile.There is also the accumulation factor to consider because each project is a potential risk for several years: see at “claims made” below.

Any work you do creates potential risk. Consideration also needs to be given to the risks associated with work you have done in the past, as claims can arise many years after the project is completed. There may also be contract obligations that require insurance to be maintained for an extended period of time.

Yes Professional Indemnity Insurance covers your past work, although restrictions can apply to past work before you first took out a Professional Indemnity policy – refer retroactive date.

Provided you maintain current professional indemnity insurance, claims notified under the current insurance can be in relation to services you provided years before.

Run-off insurance is a term that describes a claims made policy, such as Professional Indemnity Insurance, that only covers past business activities. Typically, this occurs when you have ceased practice and/or retire from practice.

Policies are endorsed as run-off policies when you no longer require cover for any future business activities. Because there is no cover for future work, pricing reductions apply and gradually reduce over time.