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Is Your Firm Covered?

A design professional encounters many risks that can result in financial losses to numerous
people. Insurance transfers those risks to an insurance company in return for a premium
payment. There are a number of important types of architecture firm insurance that an owner
should understand to determine if coverage is warranted.

These include but are not limited to:

Professional Liability Insurance to defend and pay on behalf of the architect for claims
alleging an error or negligence in the performance of professional duties; without this coverage,
one puts the firm and its architects in jeopardy. With professional liability coverage, a firm
continues to retain some risk such as their deductible, costs exceeding policy limits, or costs for
claims that are excluded from the scope of coverage.

Business Owners Insurance is commercial general liability coverage, also known as P & C (or
property and casualty). It covers specific business exposures, such as computer equipment,
laptops and cell phones, valuable papers and media, accounts receivable, and even business
property. Sometimes riders may be added for workers compensation and employee practices
liability insurance. There is now separate insurance coverage available for cyber liability.
Cyber Liability Insurance is designed to address potential cyber-attacks including digital
crimes such as cyber extortion and deceptive transfer, and liability for privacy or website media
issues.

Key Person Insurance is important to help cover business expenses in the event of the loss of
an important person to the firm such as a co-owner. In this case, when the key person would pass
away, the firm’s beneficiary would be able to cover lost income that the key person would have
generated to help pay bills and wages while allowing the surviving owner(s) the time to figure
out next steps.

Business Overhead Expense Insurance provides financial support for major office expenses if
you become disabled. These expenses may include employee salaries, rent, business loans,
utilities, insurance premiums and other expenses your business needs to cover in order to keep
running until you are able to return to work.

Health Insurance as an employee benefit is arguably the top way to attract and retain the best
employees in your workforce and most highly valued by newer workers. An employer can offer
a Health Reimbursement Arrangement (HRA) as an employee benefit, which is an employer-
funded, tax-advantaged benefit that can be used by employees tax-free to reimburse all or part of
the health insurance premiums after the employees purchase their own health insurance.

Employee Term Life Insurance and Employee Disability Insurance may also be offered as


part of your employee benefits package and can help to attract, retain, and motivate your
employees. Employee benefits acknowledge employee value and send a message of concern
about your employees’ well-being.

All this architecture firm insurance coverage is important to consider when you own a firm. By
taking steps now to make sure that your business is covered in case of a loss or a lawsuit in the
future, and your employees are protected, you’ll ensure the future success and survival of your
firm.

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