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corporate structure and insurance for architectural practice and design-build firm

  • 1.  corporate structure and insurance for architectural practice and design-build firm

    Posted 11-30-2018 17:26
    I have a design-build firm which is registered as a corporation and I buy, rehab and sell houses under this corporation. I also have a small architectural design practice in addition to the house flipping business. I perform the design practice under the same design-build corporation. My wife and I are the only shareholders of the corporation. 

    I am evaluating the pros and cons of splitting my architectural design practice from the house flipping business due to insurance and liability reasons. My revenue from design practice is less than than $10k. I am not sure if I will be able to find a seperate professional insurance for such a small design practice. I will appreciate some feedback from other architects in similar situations.

    Sohail Ahmed
    President
    S2N2 Design Build Inc
    Fort Worth, TX
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  • 2.  RE: corporate structure and insurance for architectural practice and design-build firm

    Posted 12-03-2018 18:14

    Sohail,
    Last month, I switched my small arch'l practice prof. liab. insur. over to Hiscox Insurance Co. Inc. for more than a 50% savings in premium from my previous co.  Hiscox has a good AM Best rating.
    -Russ



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    Russell VerPloeg AIA
    President
    Ver Ploeg Architecture
    Des Moines IA
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  • 3.  RE: corporate structure and insurance for architectural practice and design-build firm

    Posted 12-03-2018 18:21
    I use Travelers Insurance and they can accommodate most firms such as yours and at good rates, comparable in my case to Hiscox.


    Daniel Alter, AIA
    DANIEL ALTER ARCHITECT PLLC






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  • 4.  RE: corporate structure and insurance for architectural practice and design-build firm

    Posted 12-04-2018 08:09
    Sohail,

    Check with Hiscox Insurance. They have a professional liability policy for small design businesses. I have a side business and with similar revenue to yours and the policy I have is only $500 a year, though there are different options and variables.

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    Mike Stone, AIA

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  • 5.  RE: corporate structure and insurance for architectural practice and design-build firm

    Posted 12-05-2018 19:16
    Sohail,

    If you intend to continue designing and constructing simultaneously, I advise you to form separate entities as soon as you can. The licensing, insurance, and banking systems are almost always set up in a way that each of those entities will have an easier time than the two combined. Some states even prohibit architects from doing construction work. The insurance requirements for the two are very different too, and it is much simpler to insure them separately.

    The best reason to separate them, however, is that if you are good at both things, you will find opportunities to design buildings for clients that only want that, and to build projects for clients whose other architects see the quality of your construction work. and you will want both "brands" to have their own identity, and to grow on their own.



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