I have been trying to sign the Client Architect Agreement with a smart developer. They crossed out the “Limit of Liability Clause” in the agreement where I filled in, as advised, “10 x the architect’s fee”. They think there should be no limit to my liability!  If this is so, and I undertake an 8 mil project, does this mean I am not covered under this policy?

Also: What does it mean when my policy says “5 million with 4 reinstatements” and what is “in the aggregate”?  What if I get, for example, an $ 8 mil. claim made against me?

Yours confused,
Bella La Corbusiere


Dear Bella,
Thanks for your important query!

There seem to be many different opinions amongst the ArchiTeam members what may be fair to put there. The legal adviser who helped us draw up the agreement, as you have already been told by the office, said 10 x the architect’s fee is a fair amount (because I think that’s roughly the amount of most budgets). Another opinion was heard at a VCAT tribunal which said 3 x the fee. Some have even said they put 1 x… Not sure how their clients react to that…?

I have checked firsthand with our brokers and the advice is that there really can be no guarantee, that whatever figure you put there cannot be challenged in court, as this will come down to what actual damages will be awarded to the plaintiff in any particular case. So, in my view this clause is purely there to remind clients, that even though the architect carries Professional Indemnity Insurance by law, this is not a license to “take architects to the cleaners” at every turn.

Your developer client-to-be should actually know the situation, so in my opinion, it is a kind of a “bullish” action of them to delete this clause and put you on the back foot. It is not a good feeling to have something crossed out in your fee-proposal by a client-to-be. You may wonder how your working relationship will develop further if it starts off like this.

In my opinion, the liability issue itself should not be such a sticking point, for the reasons mentioned above. They may have just been trying to “educate” you in an unsubtle way. So, staying cool developer client and be prepared to stand your ground with them. Best of luck.


To understand the ArchiTeam PI group policy best and ask these very pertinent questions, please make sure you come to our free but compulsory Insurance CPD seminar at MSD at 6.30pm on 7 August 2019.
Bookings here

We ask that any questions you have, be submitted by Wednesday 31 July.

Some refreshments will be available beforehand with the opportunity to mingle with fellow members before things get serious, with our brokers explaining the details of our current policy and other items. Please ask many questions as we will all learn from each other’s queries.

ArchiTeam held these very useful events regularly in the past, and the current Board has decided to reinvigorate the idea, due to the recent changes in the area of PI insurance for architects, in general, and in particular the ArchiTeam group policy.

I hope to see you there.

Yours sincerely,
W.C.P.G. Frank Lloyd Wrong

Oh, and PS:
1.  1 claim for 8 mil = Insurance pays max. 5 mil, you pay 3 mil
2.  1 claim for 5 mil and another claim (in the same year) for 3 mil = the insurance will cover both; this is meant by “reinstatement”.
3.  “In the aggregate” means all claims to the ArchiTeam group policy in one year. The ArchiTeam group policy has had a great track record, in that in over 15 years the biggest aggregate of all claims made in one year was well under $1 mil. We want to keep it this way, so hence our efforts to educate our members and thus protect our policy.


Barbara Moje
Insurance Director


Disclaimer – ‘What could possibly go wrong?’ is not an advice column, it is only general comment from ArchiTeam who are not aware of your circumstances with any issue that you may have. You cannot rely on these general comments, each member must make their own decisions about any action they should take and seek independent advice of their own if they are unsure.