Reviewed by licensed advisers at Smiths Insurance & KiwiSaver (FSP712931) · Updated 11 November 2026

Professional Indemnity Insurance for Architects in NZ

Professional indemnity (PI) insurance pays to defend and settle a claim that your design, specification or site observation cost a client money. The Registered Architects Act 2005 does not require registered architects to hold it. Client contracts usually do, and the Building Amendment Bill, introduced on 29 June 2026, would make PI a condition for design professionals on building work of $100,000 or more. It is not law yet.

In short

Building claims can be brought up to 10 years after the work, so an architect carries the exposure for a decade after a project finishes.
PI is claims-made. The policy in force when the claim arrives responds, not the one in force when you drew the detail.
Run-off cover matters if you close, retire or sell the practice.
Most practices also look at public liability, cyber and a certificate of currency for tenders.

For the wider picture, see our business insurance guide and the general professional indemnity insurance guide.

Who asks architects for PI

Clients and developers, with a minimum limit in the agreement for services
Main contractors on design-and-build jobs, passing down their limit
Councils and government agencies, with a certificate of currency at tender
Lenders and project managers on larger residential developments

Weathertightness detailing

Junctions, flashings and cladding that were drawn but fail in service.

Drawings that disagree

Your drawings and the engineer's calculations differ and the builder follows the wrong one.

A claim up to 10 years on

A house detailed in 2026 can produce a claim in 2035.

Cost and programme advice

A client says your estimate or timeline cost them a loan, tenant or sale.

Work out what to raise

Tick what applies to you

I design houses and renovations
Covers to raise: Professional indemnity
I work on multi-unit or apartment projects
Covers to raise: Professional indemnity
I work on commercial or public projects
These contracts often ask for a certificate of currency.
Covers to raise: Professional indemnity
I observe building work on site
Covers to raise: Professional indemnity, Public liability
I have staff in the studio
Covers to raise: Cyber, Premises, stock and interruption
I am an unregistered designer
Describe your work accurately. The policy follows what you tell the insurer.
Covers to raise: Professional indemnity
Drawings and client data sit on my systems
Covers to raise: Cyber
There has been a gap in my PI cover
Covers to raise: Professional indemnity

What these covers do not pay

The cost of redrawing your own plans or fixing the defect itself is usually outside PI.
Guarantees about cost or completion may fall outside the policy.
Fines and penalties are generally not covered.
Work done during a gap in claims-made cover may not respond.
Services you did not disclose to the insurer may not be covered.

General information only. Whether a cover responds depends on the policy wording.

Which clause is in your contract?

Professional standard
You agree to work with reasonable skill and care, or to a named industry standard. If the work falls short, that is the test a client may use against you.
Covers to raise: Professional indemnity
What it does not decide: It does not decide whether a claim for falling short is covered. Professional indemnity wordings differ on what is excluded, such as guarantees, fee disputes and known issues.
Design responsibility
The contract makes you responsible for design or specification work, not only for building to someone else's plans. If the design is wrong, the cost can land on you.
Covers to raise: Professional indemnity, Public liability
What it does not decide: It does not decide whether your policy covers design advice. Public liability policies commonly exclude it, and professional indemnity wordings differ on what counts as design.
Limitation of liability
A cap on what you could owe the client if something goes wrong, often tied to your fees or a set figure. It can also exclude certain losses such as lost profit.
Covers to raise: Professional indemnity, Public liability
What it does not decide: It does not decide what your insurance pays. A cap in the contract may sit below or above your policy limit, and some claims, such as personal injury, may fall outside it.

General information, not legal advice. The full clause and the policy wording decide how it applies.

Check your certificate of currency against the contract

Clients and main contractors in this trade ask for:

PI cover named in the services agreement
A certificate of currency before work starts
Cover that continues for years after the project

Check the insured name, limit and dates match the contract. The policy wording, not the certificate, decides what is covered. How a certificate of currency works

What each cover may pay, and what it usually does not

Professional indemnity
May respond to
Defence costs and damages for a negligent act, error or omission in design or observation.
Common trigger
A defect or leak traced to a drawing, specification or site observation.
Usually not covered
Redrawing your own work and work during a gap in cover.
Public liability
May respond to
Injury or property damage to visitors at your studio or on site visits.
Common trigger
A trip, slip or knocked-over item.
Usually not covered
Financial loss from design errors.
Cyber
May respond to
Response costs when drawings, client data or bank details are breached.
Common trigger
Ransomware, phishing or a lost laptop.
Usually not covered
Upgrading your security afterwards.
Premises, stock and interruption
May respond to
Studio contents and lost income if the office is down.
Common trigger
Fire, flood or storm damage.
Usually not covered
Wear and tear and events outside the policy.

If something goes wrong

A detail leaks
A window junction in your drawings fails to keep water out and the owner claims for the damage.
May respond: Professional indemnity
Have ready
- Drawings and specifications
- The services agreement
- Site observation notes
- Emails with the builder
Budget blows out
A client says the design was not buildable within the budget you discussed.
May respond: Professional indemnity
Have ready
- The brief and cost discussions
- Written advice on budget
- Change instructions from the client
Injury at a site visit
A visitor trips during a walk-through you led and breaks a phone and glasses. ACC deals with the injury, so the claim is about the belongings and any legal costs.
May respond: Public liability
Have ready
- Photos of the area
- Site visit records
- Names of those present
Studio files lost
Ransomware locks the studio server holding drawings and client details.
May respond: Cyber
Have ready
- A list of affected systems
- Backup status
- Timeline of discovery

Typical examples, not real claims. ACC deals with most injuries, so an injury claim is mostly about property and legal costs. Whether a claim is paid depends on the policy wording and the facts.

Licence versus insurance

A licence is not insurance.

What the licence or register says

The Registered Architects Act 2005 does not mention insurance. We checked the full text on 11 November 2026.
It protects the title: only a registered architect can use "registered architect", and others cannot use "architect" for design or supervision work (section 7).
Misuse of the title can attract a fine of up to $10,000.
The Building Amendment Bill proposes PI for design professionals on building work of $100,000 or more. It is not law, as at 11 November 2026.

Source: New Zealand Registered Architects Board

Do architects have to hold PI in NZ?

Not under the registration rules today. The Registered Architects Act 2005 says nothing about insurance (we checked the full text on 11 November 2026). It protects the title: only a registered architect can use "registered architect", and anyone who designs buildings, prepares plans and specifications or supervises construction cannot use "architect" unless registered (section 7), with a fine of up to $10,000.

That matters for your policy. An architectural designer who is not registered should be described as a designer, because the policy follows what you tell the insurer you do.

In practice the ask comes from the people who hire you:

Clients and developers write a minimum PI limit into the agreement for services.
Main contractors on design-and-build jobs often pass their own limit down to the design team.
Councils and government agencies ask for a certificate of currency when you tender.
Lenders and project managers may ask for evidence of cover on larger residential developments.

These are common patterns. The only requirement that binds you is the one in your signed contract.

The proposed law change

The Building Amendment Bill has been referred to select committee. It is a bill, not law, and the detail may change. Law firm Hesketh Henry's summary says it would:

move from joint and several to proportionate liability for defective building work;
prohibit design consultants, including architects and designers, from carrying out "prescribed design and other services" unless they hold PI insurance, with fines of up to $50,000 for individuals and $150,000 for entities;
apply only where the building project work is worth $100,000 or more, with the services caught and the minimum cover set later by regulation;
require designers to disclose their PI arrangements before providing those services.

The Bill text says these rules start on the first anniversary of Royal assent, and lets the Governor-General disapply the PI requirement for up to 2 years at a time if the availability or affordability of cover is, or is expected to be, materially affected. Engineers are caught too: see engineer insurance. Check the bill's current status before acting on any of this. Sources: Hesketh Henry, Master Builders, the Bill.

A practice that already holds continuous PI is well placed. One with a gap, or a limit set years ago, should look at it now.

Why claims arrive years later

Design errors often stay hidden until a building has weathered a few winters. Under the Building Act 2004, section 393, no relief may be granted in civil proceedings about building work brought 10 years or more after the act or omission. Design is included. So a house you detailed in 2026 can produce a claim in 2035. Common ways it happens:

Weathertightness and detailing: junctions, flashings, cladding and roof falls that were drawn but fail in service.
Specification: a product specified for a use it was not suited to.
Coordination: your drawings and the engineer's calculations disagree and the builder follows the wrong one.
Site observation: you agreed to observe or administer the contract and a defect was missed.
Budget and programme advice: a client says your estimate or timeline cost them a loan, a tenant or a sale.
Consent and compliance advice: a statement about what the building code or district plan would allow turned out wrong.

Many claims arrive as a builder's or owner's lawyer naming several parties, with the architect as one. Defence costs are real even when you did nothing wrong, which is a large part of what PI is for.

What it covers and excludes

A typical wording responds to legal defence costs, settlements and damages for a client's financial loss caused by a negligent act, error or omission, infringement of copyright or breach of confidence in the course of your work, and loss of a client's documents, drawings or models. Sub-limits apply to some of these.

Usually excluded:

Deliberate or dishonest acts.
Problems you knew about before the policy started.
Fines. Health and safety fines can never be insured (section 29).
Liability taken on by contract beyond what the law would impose, such as a warranty that the building will be fit for purpose or a guarantee of cost.
Bodily injury and property damage, which belong under public liability.
Work outside the profession you described, such as acting as a developer or builder on your own project.

Fitness-for-purpose and cost-guarantee wording in appointment terms is where policies and contracts most often collide. Read it before you sign, not when a claim lands.

Claims-made cover and run-off

FMG's policy wording says its PI policy "operates on a 'claims made and notified' basis" (FMG wording 2024-25). With a 10-year tail:

Keep cover continuous. A lapse leaves past projects uninsured.
Check the retroactive date when you change insurer.
Buy run-off when you stop. Vero Liability describes run-off as applying where a company "ceases to trade" (Vero Liability FAQs).

Notify circumstances, not only claims. If a builder tells you a detail is failing, tell your insurer promptly, and do not admit fault or offer to fix the work without the insurer's consent.

The limit and the contract

Start from the contracts you want to win and the largest project on your books, not from another practice's limit. Before you sign, check whether the limit is per claim or in the aggregate, whether defence costs sit inside or on top of it, whether run-off is asked for after completion and for how long, whether your liability is capped, and whether the contract asks for a warranty beyond your policy.

Price depends on the insurer's underwriting: fee income, project types, limit, excess, claims history and contract terms. We do not publish prices.

Other covers

Public liability for visitors to your studio and for site visits.
Cyber insurance: your drawings, client data and bank details sit on your systems. The New Zealand Registered Architects Board has published a guide to cyber threats for architects on its website.
A certificate of currency for tenders and appointments.
Owner and key person cover on our business protection page.

How a Smiths adviser can help

A licensed Smiths adviser will phone you to talk through which covers to look at. Some business covers we refer to another licensed Financial Advice Provider, and we will tell you who, and how they are paid, before your details go to that firm. That firm may charge fees. There is no instant online price. Smiths Insurance & KiwiSaver may receive a commission or referral payment if you buy. Cover and price depend on insurer underwriting and the policy wording. Financial advice is provided by Craig Smith Business Services Limited, trading as Smiths Insurance & KiwiSaver, a licensed Financial Advice Provider (FSP712931).

Have your latest services agreement to hand. The call is easier when the PI clause is in front of you.

Frequently Asked Questions

Is PI insurance compulsory for architects in NZ?

Not under the Registered Architects Act 2005, which does not mention insurance. Your contracts may ask for it, and the Building Amendment Bill proposes PI cover for design professionals on building work of $100,000 or more. It is not law yet.

How long can an architect be sued after a project is finished?

For building work, civil proceedings are barred 10 years or more after the act or omission (Building Act 2004, s 393). Keep records and cover for that long.

Does an architectural designer who is not registered need PI too?

The exposure is the same. A designer who prepares plans and specifications can face the same claims. Describe your work accurately to the insurer, and note that only registered architects may use the title.

What happens to my cover if I close the practice?

Claims-made cover stops responding for claims made after the policy ends. Ask about run-off cover before you close, retire or sell.

Does PI cover a builder's poor workmanship?

No. PI responds to your professional services. Poor construction is the builder's liability, though you may still be named if you were observing the work.

References

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Key person cover, if the business relies on you
Shareholder cover, so partners can buy each other out
Income protection for owners and the self-employed

Read your services agreement before you sign

A licensed Smiths adviser phones you and asks about your project types, the PI limit in your client agreement and whether you hold run-off cover. If we refer you to another licensed firm, we tell you who first. Smiths Insurance & KiwiSaver may receive a commission or referral payment if you buy.

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