Professional Liability Insurance Bylaws (Spring/Summer 2017)

Overview: From 2015 Member’s Motion to 2017 Bylaws 

Members approved a member’s motion at the May 2, 2015 AIBC Annual Meeting “that council be requested to consider mandatory PLI for all members and registrants in practice.” Council formally confirmed its support for the motion in July 2015 and requested that a presentation be delivered at the May 2016 Annual Meeting. The presentation confirmed the Institute would pursue Professional Liability Insurance (PLI) on the basis that it would be “mandatory” and tied to Certificates of Practice (CoP).

On May 10, 2016, council requested that the Bylaw Review Committee (BRC) add mandatory Professional Liability Insurance for Certificate of Practice holders to the BRC’s 2015-2018 Work Plan, and on August 9, 2016, council approved the BRC recommendation to create a PLI task-force, reporting to the BRC.

This PLI Working Group (PLIWG) was formed in August 2016 consisting of three architects and staff support, and it began meeting in September 2016. During the fall of 2016, the PLIWG examined current PLI standards for architects and other self-regulated professionals across Canada and liaised with insurance brokers to better understand the existing marketplace, which has changed substantially in the last two decades. In December 2016, the PLIWG presented recommendations to the BRC regarding the scope of mandatory PLI that would be required for architectural firms in B.C.

Previous attempts to pass bylaws requiring PLI coverage were unsuccessful (by narrow margins), likely because the marketplace was different in those periods; public, professional and government awareness had not been raised through the “leaky condo” crisis; and insurance requirements imposed by authorities having jurisdiction were not yet the norm. The ready availability of cost-effective coverage for small and medium-sized firms was also at times in question.

Unlike the past, when many architectural regulators did not require liability insurance, currently the AIBC is an outlier, along with one other jurisdiction due to introduce a system next year.

Upon review of the BRC memo entitled: New Bylaw Proposal – Mandatory Professional Liability Insurance (PDF), council endorsed, in principle, the proposed bylaws  regarding the introduction of professional liability insurance in addition to the supporting council rules and rulings.

As with all bylaw initiatives, council sought member input through an extensive spring consultation period. For 2.5 months, in-person and online sessions were scheduled in Vancouver, Victoria and Kelowna, a questionnaire was distributed, and a PLI hotline was offered for those with specific, insurance-related questions.

Owing to the feedback received, which was either generally positive or consisting of questions related to insurance issues, several items were specifically identified and addressed. The bylaw language was streamlined and a means, through council rules, was added to handle (currently unforeseen) future scenarios where council may want to exempt or modify insurance requirements.

The thrust of the bylaws is the introduction of mandatory PLI for certificate of practice holders (i.e., architectural firms). Council rules would establish minimum amounts of coverage as well as the mechanism by which evidence of insurance is provided.

The voting period for the council-endorsed bylaws opened on June 13, and ended on July 13 at 4 p.m. (PDT). As with all bylaws, eligible members were encouraged to cast their ballot.

More than 80.5 per cent of voters were in support of the bylaws, which are set to come into effect for the 2019 annual renewal cycle.

The PLI bylaws passed the government’s 45-day disallowance period at the end of August 2017, and are now in effect with compliance not required until the February 1, 2019 annual renewal deadline.

The notification period for Council Rules 8: Terms and Conditions for Mandatory Professional Liability Insurance (PLI) began on January 18 and ran until February 22, 5 p.m. During the notification period, members and associates were invited to share their feedback or questions through an online feedback form.

On March 19, 2018, Council Rules 8: Terms and Conditions for Mandatory Professional Liability Insurance (PLI) were approved by AIBC Council.

Bylaw Language with Draft Council Rules

(May 23, 2017:  Revisions–in red–further to feedback provided during the consultation phase)

16.1.1 On or before February 1, 2019, all An architectural firms, members or and licensees applying for or renewing holding a certificate of practice must supply satisfactory evidence that the applicant or certificate of practice holder has current hold professional liability insurance and comply with the bylaws and council rules related to such insurance. coverage, and must undertake to maintain such insurance over the term of the certificate of practice.

16.1.2   Council may establish rules relating to the minimum insurance amounts, and coverage, evidence of insurance, any exemptions from the insurance requirements, and other terms and conditions of the professional liability insurance required under bylaw 16.1.1.

16.1.3   A certificate of practice holder must advise the Institute in writing immediately if the insurance coverage required in bylaw 16.1.1 is cancelled, terminated or expires.

Proposed Council Rules 8: Terms and Conditions for Mandatory Professional Liability Insurance (“PLI”)

(January 18, 2018:  Revisions–in red–further to feedback provided during the consultation phase)
(Note: March 19, 2018: Council Rules 8: Terms and Conditions for Mandatory Professional Liability Insurance (PLI ) approved by council).

1. 1. Mandatory PLI coverage required under AIBC Bylaw 16.1.1 must be held in an amount of not less than $250,000 per claim with aggregate coverage of no less than $500,000.
   2. In the event that coverage amounts fall below the minimum these thresholds in Rule 2.1, a certificate of practice holder must immediately notify the institute and the terms of Rule 2.5 6 will apply.
   3. Submission of a current PLI professional liability insurance policy certificate of coverage is required as evidence of compliance with the requirement for PLI under bylaw 16.1.1. This and such certificate must be provided to the institute upon application for, or renewal of, any certificate of practice. A certificate of coverage is required annually.
   4. The mandatory PLI must provide valid insurance coverage for all projects undertaken in British Columbia over the term of the certificate of practice. [Note: A specific additional requirement for those who have obtained insurance from other than a BC-licensed broker could be added, requiring such holders to have their insurance carrier provide a letter confirming coverage in BC. Nova Scotia has this kind of requirement.]
      The PLI maintained by a certificate of practice holder must provide valid insurance coverage for all projects undertaken in British Columbia over the term of the certificate of practice.
   5. The ‘undertaking’ to maintain insurance over the term of the certificate of practice required under bylaw 16.1.1 is satisfied by duly completing and complying with the undertaking portion of the certificate of practice form as prescribed from time to time.
      In the event that a certificate of practice holder’s PLI coverage is cancelled, terminated, lapses or falls below the minimum coverage thresholds in Rule 2.1, the certificate of practice holder must:¹
      1. 1. Notify the institute, in writing, as required in Bylaw 16.1.3 and Rule 2.2;
         2. Bring its PLI coverage into compliance with Bylaw 16.1.1 and these Rules within 10 days of the cancellation or other non-compliant event;
         3. Provide written confirmation of return to PLI compliance, by way of a certificate of coverage, to the AIBC’s Director of Registration and Licensing within 10 days of the noncompliant event; and
         4. Pay any fees prescribed by council for non-compliance with these Rules.
   6. [The BRC recommends development of a rule to address ‘mid-stream non-compliance’ with PLI coverage – e.g., insurance that lapses or terminates and is not renewed or replaced immediately, thus resulting in failure to “maintain … insurance over the term of the certificate of practice”.]
      In the event that a certificate of practice holder does not comply with any of the requirements in Rule 2.5, the Director of Registration and Licensing will notify the holder in writing that the certificate of practice has expired and is no longer current. This notice will include reference to the requirements of Section 27(2) of the Architects Act, by which no person is permitted to practise or offer to practise the profession of architecture except as a holder or through a current certificate of practice. Notification of such non-compliance will also be provided to the AIBC’s Director of Professional Conduct for review and investigation.
   7. [Consider development of other administrative rules that may arise during information/consultation phase]¹Council is considering the addition of a rule requiring firms to notify clients affected by cancellation of insurance or other PLI non-compliance, in writing. The mechanism and extent of this notification is under review – member feedback is appreciated.

Other Bylaws and Rulings Affected

Bylaws 16.2 (d) and 16.3 (c)

At this time the AIBC is not proposing to members further amendments to existing bylaws, such as those governing firms and certificates of practice. These bylaws are under review by the BRC for a potential amendment recommendation to council.

However, there are two current bylaw subsections 16.2 (d) and 16.3 (c) that have essentially been dormant since their passage that will come into effect should the proposed PLI bylaws be approved. Members are advised of these subsections.

16.2      An architectural firm, member or licensee applying for a certificate of practice or renewal of a certificate of practice shall complete the required form signed by all architects and professional engineers having a principal or shareholding interest in the firm certifying that the firm, member or licensee:

(a) is registered with the Institute and is in good standing

(b) has paid any required annual fee

(c) has paid any required fee for the certificate of practice, and

*(d) has obtained the required professional liability insurance coverage.

16.3      A certificate of practice will expire without notice in any of the following circumstances:

(a) on February 1, unless it has been renewed under subsection (2)

(b) on the cancellation for any reason of the registration of the holder of the certificate of practice

*(c) on the expiration or termination for any reason of the required professional liability insurance coverage.

Council Rulings

The BRC also reviewed the council rulings found in Bylaw 34.10 related to client notification by architects and associates of their insurance status. No change is recommended to the relatively recent associate ruling (j) to the bylaw, as the proposed PLI requirement does not apply to intern architects, architectural technologists and retired architects.

However, the BRC recommends that council amend and clarify ruling (e), reproduced below, to require CoP holders to advise clients more meaningfully as to the “terms” under which their insurance is held.

(e) Before entering into an agreement to provide architectural services, a Certificate of Practice holder must notify the client in writing whether or not professional liability insurance is held and under what terms.

Consultation

Consultation on the Professional Liability Insurance initiative took place March through May 2017. Members and all other AIBC registrants were invited and encouraged to participate in the in-person and/or online sessions.

The in-person and online sessions were available to a maximum of 25 participants (each) on a first come, first serve basis. A minimum of 8 people were required in order for the session to be hosted. 

Consultation One
Date: Thursday, March 16
Time: 5:30–7 p.m.
Location: In-person (AIBC office) and online
Learning Units (LUs): 1 Core
RSVP: Closed

Consultation Two
Date: Thursday, March 23
Time: 4:30–6 p.m.
Location: Cedar Hill Golf Club, 1400 Derby Rd, Victoria (in-person session only)
Learning Units (LUs): 1 Core
RSVP: Closed
Note: The Vancouver Island Chapter Recognition Ceremony followed the session.

Consultation Three
Date: Tuesday, April 4
Time: 12–1:30 p.m.
Location: JIB Room at the Kelowna Yacht Club, 1370 Water St, Kelowna (in-person session only)
Learning Units (LUs): 1 Core
RSVP: Closed

Consultation Four
Date: Tuesday, April 11
Time: 11:30 a.m.–1:00 p.m*
Location: In-person (AIBC office) and online
Learning Units (LUs): 1 Core
RSVP: Closed

Consultation Five
Date: Monday, May 8 (Council Presentation Session, held after the Annual Meeting)
Time: 4:30–5 p.m.
Location: In-person (Vancouver Convention Centre, West Building, Room 301-5)
Learning Units (LUs): combined with Annual Meeting LU assignment
RSVP: Closed

Questionnaire

All members were invited to participate in a short questionnaire (now closed) designed to solicit feedback, concerns and questions regarding the PLI initiative. The results provided a useful outline of the AIBC landscape.

PLI Hotline

In order to assist members with specific questions and concerns regarding professional liability insurance, the AIBC offered a dedicated “PLI Hotline”, staffed Tuesdays and Wednesdays, March to April, between 9:00 a.m. and 12:00 p.m. The hotline provided an opportunity for members to speak directly with practice advisors.

Member Feedback

In addition to the questionnaire and hotline, members were able to provide feedback to the Bylaw Review Committee at: bylawfeedback@aibc.ca.

Member Vote

AIBC members and honorary members are entitled and encouraged to vote on all proposed new and amended bylaws. The passage of AIBC bylaws requires at least five per cent of the number of eligible voters and a minimum of two-thirds of affirmative majority of ballots cast by eligible voters.

After an extensive consultation period with members, the voting period for the proposed PLI bylaw amendments was set for June 13 to July 13, 2017. The above PLI Bylaw Elector Turnout graphic shows member participation in the e-vote, and will be updated on a weekly basis until July 13.

Results (bylaws)

The proposed bylaws put forward for electronic vote received overwhelming approval from the Institute’s voting members, with 80.2% per cent of voters in support. The requisite two-thirds support for the bylaws was achieved.

With an overall participation rate of 36 per cent, voter turnout was record breaking.

The provincial government’s disallowance period for the new bylaws lapses at the end of August 2017,  with the bylaws set to come into effect in parallel with the 2019 annual renewal cycle. Council rules and rulings pertaining to PLI are next to be addressed.

Notification, Member Feedback & Results (council rules)

The approved bylaws allow AIBC Council to pass rules about insurance amounts, coverage and other aspects of the mandatory PLI requirement. A draft set of rules was prepared and approved in principle by council as part of the bylaw consultation process.

The notification period for Council Rules 8: Terms and Conditions for Mandatory Professional Liability Insurance (PLI) began on January 18 and ran until February 22, 5 p.m. During the notification period, members and associates were invited to share their feedback or questions through an online feedback form.

On March 19, 2018, Council Rules 8: Terms and Conditions for Mandatory Professional Liability Insurance (PLI) were approved by AIBC Council.

Resources

Memo to Council (PDF)
President’s Message d. March 1, 2017
President’s Message d. May 31, 2017