New Insurance Agreement re AS 4122

Richard Young , 13 March 2014

A new agreement with Planned Cover means that architects insured with it after 17 March are automatically covered for the current version of AS 4122 – 2010.

As members are aware, many providers of Professional Indemnity Insurance have concerns about some of the clauses of AS 4122-2010 General Conditions of Contract for Consultants – especially in the (common) instances when clients make amendments to the standard form.

Even in its unadulterated form – without any deletions, additions or amendments – most insurers warn us that clauses 4, 23.4 and 28 could result in claims that activate any exclusion in a PI policy relating to contractually assumed duties or liabilities.

ACA – WA has been working with Planned Cover/Vero (one of the major providers of PI Insurance for architects in Australia). We are delighted to advise that all policies renewed or incepted after 17 March, 2014, with Planned Cover/Vero will be automatically insured (as per the policy terms and conditions) for the current version of AS4122-2010 in its unamended form. Changes to the terms and conditions of current policies have also been offered upon application to the relevant state managers of Planned Cover.

You may well say “which clients agree to an unamended contract these days”. At least with this policy change in place architects will now be able to say to clients, “if you agree not to amend the standard contract the architect will be insured but if you insist on amending the contract you run the risk of making a claim against the architect for which they are not insured!” This may be an important consideration when getting your client to understand that the inclusion of amendments that increase the architect’s liability and risk can actually increase the risk to both parties.

The support of Planned Cover and Vero in this matter is greatly appreciated.

Richard Young is President of ACA – WA and a director of JCY Architects and Urban Designers.