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PI Insurance

It is a Victorian Government requirement for Practising Architects to be covered by Professional Indemnity Insurance in the interests of consumers. Insurance requirements are specified in the Architects Insurance Ministerial Order (viewable via link at the bottom of this page).

Architects may hold this insurance in their own right or be covered by an employer’s policy

The ARBV requires proof of Professional Indemnity insurance cover from all Practising architects at the time of registration and annually on renewal of the policy or when insurance cover changes. The ARBV monitors compliance with this requirement.

Changes to professional indemnity insurance compliance requirements

Planning Minister Richard Wynne has remade the Architects Insurance Ministerial Order, which affects the professional indemnity insurance requirements for architects. The Ministerial Order dated 15 January 2020 will formally come into effect on 15 February 2020.

The changes outlined in the order provide that architects in Victoria will now be compliant with professional indemnity insurance requirements even if their professional indemnity insurer excludes or limits the extent to which they cover risks associated with non-compliant external wall cladding.

We recommend you check your insurance policy and familiarise yourself with any non-compliant external wall cladding exclusions or limitations. If you have provided architectural services for any buildings that have used any non-compliant external wall cladding, you should notify your insurer. If you have queries about your cover, please contact your insurer.

See page 5 of the Victorian Government Gazette to read the Ministerial Order: Click here

 

Frequently asked questions - professional indemnity insurance compliance changes

What’s changing?

Planning Minister Richard Wynne has remade the Architects Insurance Ministerial Order, which will affect the professional indemnity insurance requirements for architects relating to non-compliant external wall cladding. This follows consultation with the Architects Registration Board of Victoria (ARBV).

These changes mean that architects in Victoria will be compliant with professional indemnity insurance requirements even if their professional indemnity insurer excludes or limits the extent to which they cover risks associated with non-compliant external wall cladding.

When do the changes come into effect?

The Ministerial Order dated 15 January 2020 will formally come into effect on 15 February 2020.

What do I need to do?

No immediate action is needed, though we recommend you check your insurance policy and familiarise yourself with any non-compliant external wall cladding exclusions or limitations. If you have provided architectural services for any buildings that have used non-compliant external wall cladding, you should notify your insurer. If you have queries about your cover, please contact your insurer.

How do I know if my professional indemnity insurance covers me?

We recommend that you check your insurance policy and familiarise yourself with any non-compliant external wall cladding exclusions or limitations. Contact your insurer if you are unsure.

Information for Architects

  • A Link to the Ministerial Order is at the bottom of this page.
  • Architects are required to fully familiarise themselves with the Ministerial Order, but for convenience, the following summary of the requirements is offered.
Type of Insurance required

Architects must be covered by Professional Indemnity (PI) insurance. The policy needs to specifically cover architects and the provision of architectural services.

Indemnity must be provided

Architect directors, principals, partners, or employees, or sole practitioners should be covered by the policy.

An architect is covered if he or she holds the insurance or is named or otherwise referred to in the policy held by an employer or the firm.

Regardless of who arranges and provides an architect’s PI insurance, every architect is responsible for ensuring they comply with their registration obligations.

Amount of Insurance required

Not less than $1 million plus not less than $200,000 or 20% for defence costs, with one automatic re-instatement.

Proof to be supplied to the ARBV

Practising architects are required to provide the Board with proof of PI cover as a condition of registration in the Practising Class. The form of proof required is a Certificate of Currency or equivalent.

If PI cover is provided by an employer, proof of that employment must be provided. This can be an email from the covered architect’s email address at that employer, or an email from that employer confirming the architect’s employment.

A new Certificate of Currency needs to be provided to the Board when the policy is renewed or changed, or if the architect changes employer and is covered by a different policy. Please do not re-supply it with the annual fee payment.

Proof should preferably be emailed as a PDF to registrar@arbv.vic.gov.au. Please make clear in the message whose registration the proof is being provided for by name (as per registration) and registration number.

Architects in the Practising Class who do not provide the required proof of compliant PI cover may have their registration suspended.

Definition in the Ministerial Order of Architects requiring Insurance

The Order generally applies to “Practising architects” that is all registered architects who “carry out work as an architect or intend to carry out work as an architect”

Some relevant sections of the Architects Act 1991

Part 2—Prohibited Conduct Architects Act 1991 Act No. 13/1991

8B. Offence to work as architect without required insurance

(1) A person must not carry out work as an architect unless that person is covered by the required insurance.
Penalty: 100 penalty units, in the case of a natural person;
500 penalty units, in the case of a body corporate.

(2) Sub-section (1) does not apply to—
(a) persons employed by or working under the supervision of a person who is registered as an architect under this Act and who is covered by the required insurance; or
(b) an approved company.

Note: For insurance purposes, employees/Directors/Partners may be covered by their Firm’s or their employer’s insurance.

8C. Offence to represent to be insured when uninsured

A person who is not covered by the required insurance, must not—
(a) represent himself or herself or itself as covered by the required insurance; or
(b) allow himself or herself or itself to be represented as being covered by the required
insurance.
Penalty: 100 penalty units, in the case of a natural person;
500 penalty units, in the case of a body corporate.

17A. Order requiring insurance

(1) The Minister may, by order published in the Government Gazette—
(a) require architects or any specified class or classes of architects to be covered by insurance; and
(b) specify the kind and amount of insurance by which architects or architects in a specified class of architect are required to be covered.
[. . . .]
(6) For the purposes of this Act, a person is covered by the required insurance if—
(a) the person holds the required insurance; or
(b) the person is not a party to the required insurance but is specified or referred to in the insurance, whether by name or otherwise, as a person to whom the insurance cover extends.

Note: Architects who are required to be covered by insurance are, according to the Ministerial Order, ‘all architects who carry out work as an architect.’

Applications for Registration as a Practising Architect or for approval of a Company or Partnership must provide proof of required PI insurance cover at time of application.

Architects in the Practising Class who do not provide the required proof of compliant PI cover may have their registration suspended.

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