Majority of Architects Do Not Carry Insurance for Liability
More than half of the state’s architectural firms do not have liability insurance, according to a survey taken by the Sacramento-based California Council, the American Institute of Architects.
Of the 815 firms surveyed, 58.6% said they do not have coverage. The survey was sent to 2,700 firms, with 33% responding, which Ralph H. Bradshaw Jr., chairman of the project, called an “unprecedented response.â€
“The results seemed to show that smaller firms are much more likely to be uninsured than larger firms,†Bradshaw said. About 79% of the firms responding had fewer than 10 employees.
“Since California firms are mostly small businesses with fewer than 10 employees, the data demonstrates how big a problem the majority of California firms face in finding, affording and keeping professional liability insurance,†he said.
The survey showed that 20.6% of California firms had one or more claims during 1986 and 1987. Firms with 20 or more employees have the greatest chance of experiencing a claim. However, the survey noted that the low percentage of claims may reflect a belief that a claim referred only to lawsuits and not demands for some action, including arbitration.
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