Architecture projects can have big budgets and involve big emotions. Both scenarios can lead to legal disputes if clients feel your work falls short.
For that reason, every architect and firm needs errors and omissions insurance. You’ll also need the policies that most client-facing companies need, like cyber liability insurance and general liability insurance or a business owner’s policy. Read on for our recommendations.
Save up to 30% on business insurance
NerdWallet Small Business helps you get real-time quotes from 30+ insurers, and instant access to your Certificate of Insurance (COI) through our partner, Coverdash.
on Coverdash's website
Best insurance companies for architects
NerdWallet’s editorial team chooses the best business insurance companies based on several factors. For architects, we focused on insurers that:
- Get few complaints from customers, based on data from state insurance regulators.
- Are financially strong, meaning they're likely to be able to pay claims.
- Offer E&O insurance policies specific to architecture and design companies.
Here are our top recommendations for architects. We always recommend getting quotes from more than one insurer to find the best coverage for you.
Why trust NerdWallet
250+ small-business products reviewed and rated by our team of experts.
80+ years of combined experience covering small-business and personal finance.
Objective, comprehensive small-business insurance ratings based on the financial strength, complaint records, digital features and customer service availability of insurance market leaders. Read our methodology.
NerdWallet's small-business insurance content — including our ratings, reviews and recommendations — is produced by a team of writers and editors who specialize in small-business finances. Their journalism has appeared in The Associated Press, Washington Post, MarketWatch, Nasdaq, Entrepreneur, ABC News, MSN and other national and local media outlets. Each writer and editor follows NerdWallet's strict editorial guidelines to ensure fairness and accuracy in our coverage.
The Hartford
Best for small firms
The Hartford offers one of our picks for the best business owner’s policy, which makes it a great choice for small companies. The Hartford also sells architect’s E&O insurance, cyber insurance and the other policies most firms need. It’s a well-reputed company with relatively few customer complaints and high financial strength ratings. Architects need to work with an independent agent to get coverage.
Travelers
Best for midsize companies
Travelers’ professional liability policy for design professionals includes some network and information security protection too. The company is well known for insuring highly technical fields, including architecture and engineering. In general, it’s a great choice for midsize firms that want to work with independent agents.
The Hartford
Best for solo practitioners
Hiscox is one of our top recommendations for E&O insurance. The company underwrites architects, draftsmen, project managers and more. Hiscox professional liability insurance policies cover work done around the world, as long as the claim is filed in the U.S. or Canada. Most businesses can get a quote online, and some can buy a policy online too.
What is architect insurance?
Business insurance protects architecture firms from financial losses. Many of these are legal risks — a lawsuit from a dissatisfied client, for instance. It can also help you repair or replace office equipment after a fire or disaster.
Architect insurance can protect you in scenarios like:
- A calculation error leads to a foundation defect that your client discovers a year after the building is complete. They sue for remediation costs.
- An architect on your team doesn’t use fire-rated assemblies that local building codes require. The building fails inspection and your client sues for damages related to the construction delay.
- During a site visit, you accidentally knock over and damage a contractor’s surveying equipment. It needs to be replaced.
- A ransomware attack locks your staff out of project files and exposes confidential client data.
- Your project manager drives a company truck to a project site. On the way, they rear-end another car at a stoplight.
What insurance policies do architecture firms need?
The biggest risk most architects face is a lawsuit from a dissatisfied client. You’ll need professional liability insurance to protect against that, along with other policy types common to all businesses.
E&O insurance for architects
A design error, like a coordination error between engineers or a missed egress requirement, can lead to claims that cost more than your original design fee. Every architect or architecture firm needs errors and omissions insurance to protect themselves in those cases.
E&O insurance can cover your legal defense if a client claims you did a bad job or failed to meet the terms of your contract. It’s also called professional liability insurance. Many clients won’t sign a contract with you unless you provide proof of E&O coverage.
Tail coverage
Usually, E&O insurance is a “claims-made” policy. It covers claims filed while the policy is active — regardless of when the underlying incident happened.
A construction defect might not surface until years after a building is done. You need to maintain coverage just in case, even if you sell your practice or retire. That’s where tail coverage comes in. This is a way of continuing your E&O coverage after your policy ends. An insurance agent can help you understand how long a tail policy you need.
General liability insurance or a business owner’s policy
Every business needs one of these policies. General liability insurance protects you from certain third-party legal claims. These include accusations that you caused bodily harm, damaged a client’s property or committed copyright or trademark infringement. A BOP includes general liability insurance plus property insurance, which protects your building and the things inside.
A BOP is a great choice if you have a small office with computers, modeling equipment and paper records, since it provides both types of protection. Most BOPs include business interruption insurance too. This can cover the income you lose while your business recovers from a covered property loss, like a fire.
» MORE: Best business owner’s policies
Workers’ comp
State law probably requires you to have workers’ comp if you have one or more employees other than yourself. See your state’s rules here.
Workers' compensation pays for medical bills and lost wages when an employee gets hurt or sick on the job. Architects are probably less likely to get injured than the construction workers and tradespeople on their project sites, but you still have to comply with workers’ comp rules. Less risky industries usually pay lower premiums, though.
Cyber liability insurance
Architecture firms deal with sensitive client data, financial information and building security details. These can all be targets for hackers. Cyber insurance can cover the costs of notifying your customers about a data breach, doing a forensic investigation and dealing with the legal fallout.
Commercial auto insurance
If your firm has work trucks or you often drive to client meetings or job sites, you need commercial auto insurance. Personal auto policies often exclude vehicles if an accident happens while you’re driving for work. Commercial auto insurance can cover your employees’ vehicles while they’re driving for work too — your business doesn’t have to own them.
Special considerations if you oversee the building process
Some architecture firms also serve as general contractors. These design-build architects face different risks.
In general, architects draw plans for a project. Engineers apply building codes to create more detailed plans. Then, contractors ensure that those plans are carried out.
Say your firm completes a retail building, but its doorways are two inches too narrow to comply with the Americans with Disabilities Act. Who’s responsible? If the plans were drawn incorrectly, the architecture portion of your business is at fault. If the plans were right but the builder carried them out incorrectly, the contracting portion of your business is at fault.
In the latter scenario, your architect’s E&O policy might not cover an error made in the construction process. That would be a contractor’s E&O claim. Work with an insurance agent to make sure your business is fully covered.
Save up to 30% on business insurance
NerdWallet Small Business helps you get real-time quotes from 30+ insurers, and instant access to your Certificate of Insurance (COI) through our partner, Coverdash.
on Coverdash's website
How much do architects pay for insurance?
Architects pay $141 per month for professional liability insurance on average, according to online insurance agency Insureon. General liability insurance averages $33 per month and workers’ comp is $50 per month.
Larger firms will pay more. For instance, an architect’s office in Kentucky got a quote through NerdWallet Small Business for professional liability insurance. That company had $500,000 to $1 million in annual revenue and 26-100 employees. Travelers quoted about $5,200 for professional liability insurance.
Insurance costs vary for lots of other reasons too. These factors might affect your premium:
- How many clients you have. Larger businesses have more professional liability risk, since there are more opportunities for error.
- What you build. Certain types of buildings, like laboratories that deal with dangerous chemicals, have more specific requirements and more problems if those requirements aren’t met.
- How much coverage you need. Young Architect Academy, a website for architecture students, suggests carrying a per-claim limit that is higher than the value of your biggest project.
- Where you operate. Some states generally see more lawsuits than others.
- Value of your office equipment. The more property your business owns, the more coverage you’ll need.
- Your claims history. Past claims increase premiums across the board.
Limit of liability provisions in contracts
While negotiating contracts with your clients, you can consider adding a limitation of liability provision. This is an agreement that, if the client later sues, the legal claim won’t exceed a certain amount.
This can help ensure that you don’t max out your insurance policy. If claims are relatively small, you may be able to handle some of them via self-insurance, without filing a claim. That can help you control costs over time.
Work with an attorney if you want to explore this option. They can help ensure that your contract is legally enforceable.
How to get insurance for your architecture firm
If you work on your own or have a small team, you might be able to get insurance online. But the larger your business is, the more helpful an insurance agent can probably be. They can help you understand all your different risk exposures and make sure you’re covered against them.
Follow these steps to get insurance for your architecture business:
- Decide whether you want to work with an agent. Agents and brokers can provide personalized advice. Many can sell insurance from several different companies, which can help you get the best coverage at the best price. If you prefer to DIY your coverage, though, small architecture companies may be able to buy all the coverage they need online.
- Get several quotes. Every insurance company calculates premiums a little differently. So even if you share the exact same information with each one, they’ll probably charge you different prices. Compare several quotes to find the best coverage at the best price.
- Buy insurance. Your agent or broker can do this, or you can complete your purchase online or over the phone. If you pay in installments, make sure you set up automatic payments. Your coverage could lapse if you miss one.
- Download your certificate of insurance. You may need to share this proof of coverage with your clients. Download it and store it in a memorable place.
- Review and update your coverage annually. Make a standing appointment with your insurance agent to go over how your business has evolved. You might need to buy additional coverage or increase your policy limits. Getting quotes from other insurers can help you ensure you’re still getting a good price.
