Professional indemnity claims: free advice costs thousands

category Claims

To School of Risk home


pile of bricks Smoooochie

Talk is cheap

This is the tale of a well-meaning architect and a surprisingly tenacious septuagenarian. As always, the names have been changed but the rest is all too real.



Our client is Samantha Davies, an architect of many years’ experience. She bought professional indemnity insurance specifically for a contract she was entering into with her client – a sweet old lady we’ll call Mrs Smith.

Mrs Smith was getting on a bit and she wanted an extra groundfloor room for when the stairs proved too troublesome. Sam’s job was to design such a space.

Now, as Mrs Smith was a friend of Sam’s mum, Sam had queried the need for professional indemnity insurance when she spoke to us. However, she’s also the kind of person who likes to have Ts crossed and Is dotted and so she bought a policy anyway. Just in time to start work in fact.

The job went well, and Mrs Smith was delighted with the proposed design. So much so that she asked Sam if she could recommend someone to build it.

So, as a final favour, Sam arranged for Bricked Up Ltd, a local builder known for speed and value to give Mrs Smith a quote – to which she accepted.


Best-laid plans

Six months later we got a call from Sam. In place of her usual cheery voice was a tense, uncertain one. She explained what had happened.

Two months after the building work had started, Sam still hadn’t had a penny from Mrs Smith. This was despite countless phone calls and letters.

And then, just as Sam was considering how to get the money she was owed, a letter from Mrs Smith’s solicitor plopped through the door.

The sweet little old lady we knew as Mrs Smith was suing Sam for negligent advice and breaching her duty of care.

Eh? As far as Sam knew, everything was rosy.

What she didn’t know was that Bricked Up Ltd, the builder known for speed and value, had been so speedy that they hadn’t even finished the foundations before disappearing off the face of the earth.

The extension was left half-built and condemned unsafe, and Mrs Smith was £25,000 out of pocket. Sam was being asked to repay the value of the project, plus an extra £20,000 for the emergency demolition and the inconvenience.

Sam was, understandably, in meltdown.


Good intentions

How could this happen? That small favour had landed her in big trouble is how. Although all she’d done was arrange the builder’s quote for Mrs Smith, she had (innocently) breached her duty of care as a professional by recommending them. Whether she liked it or not, there was a case to answer.

We explained that she wasn’t alone and that this was by no means unheard of. And we also explained that, thankfully, her professional indemnity insurance was there to help.

To say she was relieved was an understatement. With the financial might and legal expertise of her insurer behind her, for the first time in months she could see a light at the end of the tunnel.

Negotiations with Mrs Smith’s legal representatives started and just a few months later, with help from us and the insurer’s appointed solicitor, the claim was settled for £35,000. Sam was understandably delighted with the outcome.

And after that? Well, a few risk management tips, a small change in procedure and a new perspective on sweet old ladies later, Sam renewed her policy with the same insurer.

Job done.


If you’re an architect, you can get £100k cover, and the same protection Sam had, from only £190 a year. Find out more here.

Image / photographer: pile of bricks Smoooochie |

More from this category

How does an insurance broker help with claims?
Claims-in-a-cartoon #2: the five-grand typo
Claims-in-a-cartoon #1: free advice costs thousands
Buy online in minutes. Less admin, more business!
yay banner image