Search Your Query Here

An In-Depth Guide To Professional Liability

When people hire a professional service provider, they do so with a belief that they have the required expertise and skills to complete the job in a professional manner. Furthermore, it is also expected out of them that they will be adhering to a particular code of conduct while providing their services. In case they fail to meet the set standards, which are obligatory for them to follow or their services are not up to the mark and have caused losses to their clients, they can be subjected to a professional liability case.

In this article, we have covered a detailed guide to professional liability. Continue reading to know more about it.

What is Professional Liability?

Professional liability refers to legal obligations that arise out of negligence or error(s) caused by a professional. Simply put, if a professional i.e. an accountant or an attorney, during their practice, causes harm to an individual due to their negligence, error or omission, it is termed as a professional liability.

The very basic thing about professional liability is that the professional who is guilty of harming an individual is only obligated to compensate to those whom they owe a duty of care i.e. injurer and no one else. For example, if an accountant has made an error in the records of their clients, the client reserves the right to file for a compensation from the accountant because of the loss of revenues they have suffered due to their negligence.

What is the Negligence that can lead to Professional Liability?

In this section, we have shed a light on negligence that can cause professional liability on the professionals. To start with, any mistake that an accountant, an attorney or any other professional individual makes cannot be termed as negligence.

In case there is a duty of care among both the parties, only then a mistake can be identified as a negligence. In addition to that, a professional can be held responsible for professional liability if they have been found guilty of not following the required standard of care. Lastly, for claiming personal liability, it is important that the damage has been suffered by the grieving party as a result of the error, mistake or omission.

A professional can also be charged with a professional liability case if the professional work they have completed for their client has fallen below the level of required standard and caused losses to their client. In such a case, the potential risk of losses client is facing is the deciding factor in the amount of care required a professional will be charged for. Furthermore, the protective measures that a professional could have taken to avoid the losses are also taken into consideration.

An Example of Professional Liability Case:

An architect has been handed over the work to design an office building. He starts to work with a contractor. However, due to certain flaws in the design, the contractor couldn’t complete the deadline he was given for the completion of the project. This causes loss of revenues to him. In such an event, he reserves the right to file for a professional liability case against the architect.

How can a Professional avoid Getting Such a Charge?

The first and foremost way for a professional to avoid getting charged with such a case is to firmly follow the recognized standards of performing their job. Moreover, they are required to pay complete attention to detail to the work they have taken charge of. It is important for them to make sure quality is maintained when it comes to services they are offering.

Most of the professionals cover themselves with a professional liability insurance. It has proven to be a primary way to alleviate the risks that come with a professional liability case. A point to note here is that a professional liability insurance is not a general liability insurance.

Professional liability insurance offer coverage for professionals who accidentally make a mistake that amounts to negligence. Furthermore, those professional service providers who prepare a contract for a company that ends up incurring losses for them, these policies also offer coverage for them.

There are different types of professional liability insurance policies; therefore, a professional is required to be well versed in the details of all types of policies while purchasing them. Moreover, there are certain risks associated with buying such policies as well. First of all, they are expensive. So, for the professionals who are looking to create a strong foothold in the industry, buying a professional liability insurance may burn a hole in their pockets.

The Role of an Attorney in a Professional Liability Case

An attorney comes into a picture when a professional service provider who is charged with such a case fights for his defense. They take charge of the case and represent professional service providers in the court against the claims charged on them.

The services of an attorney can be availed by law firms, brokers, accountants, architects, attorneys, and insurance agents, investment firms etc. Moreover, counselors, psychologists, and medical doctors, if charged with a professional liability case, can also avail their services to save themselves from the charges laid by their clients.

A Final Word

A professional liability is a charge that every professional service provider dreads. No professional will ever like such a case to be charged against them as it can not only cause financial losses to them but can also greatly impact their reputation as a professional. As stated above, it implies that a professional service provider performed their services in an incompetent manner or was negligent in their services. Therefore, their reputation will be at a stake if they are proven guilty of the charges laid on them. As we all know, the biggest asset of a professional, apart from their skills, is the word of mouth, which will be greatly hampered in the happening of such an event.

Author Bio:
Brandon L. Fernandez is a native of Fort Lauderdale, Florida, and is an associate in the firm’s Miami office. Mr. Fernandez’s practice includes all aspects of federal and state civil trial litigation with a primary focus in civil rights litigation, complex commercial litigation, government liability, law enforcement liability, labor & employment law, premises liability, and professional liability.