Architects across Australia are being asked to sign contracts that leave them liable for vast costs not covered by professional indemnity (PI) insurance.

The Australian Institute of Architects and PI insurers have been consulted over numerous contracts issued for housing projects under the Federal Government’s economic stimulus package that leave the architects virtually uninsurable.

The institute’s NSW country Chairman Chris Jenkins says eight regional firms on the state’s north coast alone have raised concerns that contractors are trying to pass on the legal responsibility for the work of all the consultants to the architect.

Depending on the complexity of the project, consultants include engineers, structural engineers, civil engineers, planners, building certifiers, and ecological consultants, including flora and fauna, flooding and bushfire.

“What the managing contractors are trying to do is to remove as much of the risk from themselves as possible and pass that risk onto architects,” Mr Jenkins told insuranceNEWS.com.au.

Sandra Purser, MD of the institute’s insurer Architects Professional Risk Services, says architects have contacted them about contracts that contain onerous, one-sided clauses that give the architect liability that PI insurance doesn’t cover.

“If architects sign these contracts, their PI insurance is not voided or cancelled, but they may not be fully insured for some of the obligations contained in the contract,” she told insuranceNEWS.com.au.

Ms Purser says this problem is not unique to architects and the assumed liability exclusion commonly appears in PI policies across all professions.

Mr Jenkins says many architects have refused the contracts point blank and others have negotiated an agreeable contract, but some have signed due to inexperience, faith in the other party or desperation for work.

Ms Purser recommends architects check their policy wording and refer any contract that they’re going to sign to their broker to make sure all aspects of the contract are insurable. The institute is also distributing guidelines on analysing contracts to members.