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Asbestos claims are not generally covered
Since early 2003, professional indemnity insurance policies have routinely excluded claims arising from or in any way related to asbestos. How to act in relation to asbestos in project work requires careful consideration of both the client's needs and the risks of providing uninsured services.
Because professional indemnity insurance is written on a 'claims made' basis, exclusions apply to all claims occurring after that date, irrespective of when the professional services giving rise to the claim were performed.
These exclusions are a response to a global trend in the international insurance market, whereby insurers and reinsurers are unwilling to assume the risk of asbestos claims against architects.
Architects should familiarise themselves with the precise terms and scope of their particular policy, so that they understand the specific limitation on cover under their policy.
The risk of the presence of asbestos will arise in relation to renovation or refurbishment projects. This is particularly relevant when undertaking revision or refurbishment projects dating from the mid-20th century, when the presence of asbestos is more likely. In these circumstances, an architect may consider advising a client to undertake testing of the subject area, including underground, prior to design work commencing. This testing may be prudent even when an asbestos register has been maintained by the client or building owner.
Typical (uninsured) liability exposures faced by architects in relation to asbestos include:
- architects assuming contractual duties with respect to asbestos and allegedly failing to discharge those duties
- architects themselves appointing specialist asbestos removal subconsultants and subcontractors, who fail to perform adequately
- personal injury claims arising from alleged design or specification errors
- property damage, eg cost of removal, building remediation; or rectifying faulty remediation
- failing to advise clients to appoint specialist consultants
- giving negligent advice regarding building-maintenance procedures.
There is very little that architects can do to redress liability exposures arising from past services provided. With regard to present and future services, the principle is that the risk should lie with the party best able to control it. To that end architects are advised to do the following:
- Transfer the risk through your Consultancy Agreement with your client. You should seek legal advice on the terms of your Consultancy Agreements, or if you are insured through Planned Cover, suitable clauses can be recommended for you.
- Review all current consultancy agreements including any briefs, scopes of services and existing terms to determine whether these provisions may expose you to any responsibility for the detection, removal or handling of asbestos or other hazardous materials. If so, negotiate with the assistance of legal advice, to remove those obligations from your contract as you are not insured for that work.
- As it is the client who stands to benefit from the successful completion of the project, insist that the client retains licensed asbestos consultants.
In summary, an architect’s professional indemnity excludes all advice in relation to asbestos so exclude any such work from your contract and scope.
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