“An added ‘fitness for purpose’ clause is scuppering my PI cover.”
The question deals with whether professional indemnity insurance would cover a promise that the results of professional services would meet a “fitness for purpose” test. The answer can be found in the practice resources section of BD Online (www.bdonline.co.uk), the electronic newsletter for Building Design: The Architects’ Website.
An Americanized translation might be, “A warranty that my documents or design will be fit for the purpose intended is excluded from coverage by my professional liability insurance policy.” The issue is the same: whether you are providing professional services under British law or American law, the duty you have to a client is to meet the standard of care for the services provided. If you guarantee your deliverables or the project for which you provided design services, you have assumed a contractual obligation that exceeds your normal legal liability. And neither American professional liability insurance nor British professional indemnity cover is meant to include such contractual obligations.
The response in BD Online stated it this way:
“You are obliged to do your reasonable best to ensure your design meets the client’s intended purpose and complies with regulatory standards, but that falls short of you providing a guarantee that it will fit the bill because of all the other intangible and variable issues outside your direct control.”
The newsletter also pointed out that the questioner:
“will be hard-pressed to find any architect’s professional indemnity policy that would cover you for fitness for purpose. Your broker could help persuade your client that since such a clause is not really insurable by you, it is not in his interest as he could lose the protection of your insurance cover."
We couldn’t have stated it any better. We work hard on behalf of Schinnerer policyholders to educate their clients that such warranties might be suitable for mass-produced products, but are neither reasonable nor insurable for design firms and their professional services.
If you explore the www.bdonline.co.uk website, click the tab labeled “Practice” to obtain the British view on practice advice and other issues, including personnel management and ethical dilemmas. While you cannot rely on the advice given—any issue involving legal or ethical issues needs to be discussed with jurisdictionally and professionally competent advisors—the questions and comments can give a different, and reinforcing, perspective on the many practice management issues you face.