Professional Indemnity Insurance is the main concern and risk for any architectural firm and professional, the same applies to engineers. While you do everything you can to avoid mistakes in your work, this is not always possible. Sometimes something as small as a mismeasurement or bad advice can cause your clients financial loss.
Under the ‘New Development Licensing Policy’ which came into effect from 1 October 2020, a new fast-track process has been created for applications for planning permission and building permits for dwellings up to a semi-detached/ two dwelling units on a plot of land or a plot under construction. The main condition for the implementation of this new procedure is that the designers (architects/engineers) submitting the studies must have appropriate professional liability insurance, to which end a certificate will be issued by the Cyprus Scientific and Technical Chamber.
The scope of the insurance and the minimum acceptable terms and conditions are as follows:
- Services covered: All services which the natural person provides and for which he he/she is licensed by the CSTC (ETEK)
- Definition of insured person: the natural person and his staff
- Definition of Coverage: Insurance Coverage against Civil Liability for Professional Negligence or Omission (Errors and Omissions) in the provision of the Services
- Minimum Limit of Cover: €300,000 per claim and per period of insurance including costs and interest
- Retroactive Effective Date: not applicable, retroactive effect from the date of the first application is recommended under the new licensing framework
- Geographic Boundaries: Republic of Cyprus (areas controlled by the Republic of Cyprus)
- Law/Jurisdiction: Cyprus / Republic of Cyprus Courts
- Maximum acceptable deductible: 5% of the annual turnover declared to the insurance company
- Minimum notice for cancellation or non-renewal: 60 days
- Period of coverage: Annual
It is noted that legally registered Architecture/Engineering firms that have a valid certificate of registration from CSTC (ETEK), meet the insurance requirement. These firms will be sent the relevant certificate of insurance by the CSTC (ETEK), without any action being required by them.
In addition to the legal obligation and depending on the project, the minimum insurance limits set by the STCC (ETEK) are not always sufficient to cover any claims against you or your employees.
At Cosmos Insurance we can offer comprehensive cover solutions of much larger limits which can also be extended to include:
- Retroactive Cover,
- Libel and Slander,
- Loss of Documents and
- Employee Dishonesty
