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Lawyer professional liability insuranceIt may be easiest to understand the law of design Professional Liability Insurance by comparing it with the liability of owners and general contractors. The liability of owners and general contractors originates from their roles as possessors of the property under improvement, or premises liability law, and as employers of independent contractors. Of course, these parties may take steps to diminish their potential professional liability. An owner might relinquish all possession of the premises to the general contractor and disavow in the prime contract any responsibility for worksite safety. However, professional liability cannot be entirely eliminated.
Some courts view architects, lawyers and engineers who know of a hazardous condition as having a professional duty to act on that knowledge. This view is not well articulated. It may stem from the professional ethics of architects, lawyers and engineers, but its origin has not been found in the licensing laws that are designed to protect the general public. In sum, the law of design professional liability has its origin, first and foremost, in the design contract. The law of design professional liability for worksite accidents must be understood in light of the division of responsibilities between the architect, lawyer or engineer and the general contractor in implementing the owners vision for the completed project.
A professional liability insurance policy which is also called as the malpractice policy covers a professional, such as a lawyer or surgeon, for possible negligent oversight occurring within the scope of a professionals work. Other insureds of professionals liability insurance policies include, like accountants, engineers, and actuaries. Professional liability insurance policies typically contain the following exclusions from coverage ; grossly negligent acts including the acts of assistants that the professional controls; willful or wanton misconduct; punitive damages, fines, or penalties; liability resulting from product liability losses including products distributed by the insured ;"> persons employed by the professional unless they are specifically listed on the policy, administrator, or employee of any hospital or medical clinic, health maintenance organization, preferred provider organization, or intermediate provider organization.
The limitations and exclusions found in a typical Professional liability insurance policy is important to note because they indicate uninsured risks that potentially require additional asset protection measures. Furthermore, coverage is limited by policy limits. Therefore, if a judgment exceeds the policy limits, the insured will be liable for the excess. A client may ask whether he should drop his professional liability insurance coverage once he implements an asset protection plan. Under most circumstances, this would not be a wise move. In the event of a malpractice claim, the insurance carrier will bear the cost of defense and in any event the policy will server as another wall of protection for the client.
Almost all professional liability insurance policies have exclusion for punitive damages. Further, in many states, punitive damages are not awarded unless the plaintiff can prove gross negligence or willful or wanton misconduct. Therefore, as a trial strategy, in order to shake down a professional defendant by causing him concern over the issue, a trial attorney may allege gross negligence. The risk, then, is that a jury may find that the professional was grossly negligent or engaged in reckless misconduct and, therefore. Award punitive damages. In the event of such an award, the professional will be fully exposed with respect thereto.
Construction participants and insurance companies, and their lawyers, need a comprehensive guide to construction accident law. The participants need to understand, at least in general terms, the legal issues involved in construction accidents. Yet fulfilling that need seems at odds with the complexity of the legal issues, which are sufficiently difficult in concept and wide-ranging in subject matter to tax the most diligent lawyer.
Construction site personal injury claims are covered by two types of insurance. Injury to the insureds employees is covered by workers compensation insurance. Injury to anyone else is covered by liability insurance. Design professionals also need coverage against personal injury claims. Because of their status as professionals, they obtain professional liability insurance, also called errors and omissions coverage. In contrast, the contractor acquires general liability insurance for itself and the principal. Construction managers, as hybrids between contractors and general contractors, have special insurance concerns. So too do design or build contractors, because they combine both construction and professional design functions.
Professional liability insurance covers consequential bodily injury claims by family members of the injured employee and third-party-over claims for non-contractual indemnity and contribution brought against the insured employer.
Definitions in commercial general liability insurance, professional liability insurance, and builders risk insurance have been designed with the concept that the design and build function will be separate. By placing design or build responsibilities in the same entity, insurance coverage may have either gaps or overlaps in coverage. Traditional methods of categorizing the design and build functions may also create conflicts among insurance coverage whether the damage has resulted from negligent design, which is covered by professional negligence insurance, or a construction defect, which may or may not be covered by some sort of liability insurance or performance bond. Contractors commercial general professional liability insurance generally excludes coverage for claims that result from negligent design.
Construction exclusion in most professional liability insurance policies leaves the execution of the design to the contractor. These also exclude design or build activities. Design or builders tend to be contractors with staff architects. The design or builder needs special coverage, such as contractors design professional liability insurance, to protect its design-related risk.
Owner contracts with a design or build contractor who, in turn, contracts with the architect, have no special consequences to the professional liability insurer. However, professional liability insurance may be unavailable for some parts of the designers work when the owner contracts with a contractor to provide design or build services. Design or build has traditionally been covered on a project-by-project basis, with the professional liability insurer underwriting each exposure by determining how the owner has contracted for the design or build services, evaluating what is being designed and constructed, and then picking and choosing which of the projects it is willing to insure.
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