JCJ Logo_Large

We were excited to see that AIA Florida picked up this timely article by Mark Jackson of Jackson Collinsworth Johnson, an a/e ProNet member. Hope you find it helpful, too!

There are two important contract clauses that design professionals should include with every client contract. The first clause provides protection to individuals and the second limits the firm’s liability.

Individual Protection

The first clause we recommend gives individual protection for your licensed professionals. In 2013, the State of Florida signed a law relating to design professionals known as the Fairness in Liability legislation. Beginning July 1, 2013, design firms are now able to negotiate contracts that protect their professional employees from being sued individually by their clients.

The new law grants design professional employees immunity from liability for economic damages resulting from negligence occurring during the course and scope of a professional services contact. The law does require that the design firm maintain professional liability insurance as required under the contract.

The new law also extends to individuals the protection of contractual limitation of liability clauses. This comes four years after the courts ruled that individual professional employees were not protected by limitation of liability clauses in a contract. (Florida appellate court case Witt v. La Gorce Country Club, Inc., 34 Fla.L., Weekly D1161a)

Design professionals should take advantage of the benefits of this new law. Your contracts should be amended to include language that an individual employee cannot be held liable for negligence. The law has five conditions for this protection to apply:

1. The contract is made between the design firm and the client.
2. Individual employees are not to be named as a party to the contract. All professional services contracts need to be made between the client and the business entity.
3. The design firm must maintain Professional Liability insurance, as required by contract.
4. The contract contains a prominent statement, in uppercase font that is at least five point sizes larger than the rest of the text, that an individual employee or agent may not be individually liable for negligence.
5. Any damages are solely economic in nature and the damages do not extend to personal injuries or property not subject to the contract.

To continue reading, download the PDF here…

scalesWhere does professional liability end and personal liability begin? For design professionals, the line can sometimes be fuzzy, especially with regard to personal injury claims.

Now, Florida’s lawmakers have taken steps to limit liability in for design professionals in these cases.

According to a recent announcement by the legal firm of Smith, Currie & Hancock LLP:


“On April 24, 2013 Governor Scott signed Senate Bill 286 into law creating section 558.0035, Florida Statutes. This new law grants individual design professionals employed by a business entity or an agent of the entity immunity from liability for economic damages resulting from negligence occurring within the course and scope of a professional services contract under the following conditions: (a) the contract is made between the business entity and a claimant or another entity for the provision of services to the claimant; (b) the contract does not name an individual employee or agent as a party to the contract; (c) the contract prominently states that an individual employee or agent may not be held individually liable for negligence; (d) the business entity maintains any professional liability insurance required under the contract; and (e) any damages are solely economic in nature and do not extend to persons or property not subject to the contract. The law takes effect on July 1, 2013 and does not state that it is retroactive…

This new law erodes Florida’s common law which has allowed professional negligence claims against an individual design professional based on the professional’s violation of her duty of care to those who may be foreseeably injured. Florida’s common-law imposes a duty of care on all individual professionals that exceeds the duty of care of the general public. Professionals, such as doctors, lawyers, accountants, and design professionals, have always been held to a higher standard of care and associated individual liability for professional negligence. This new law will afford design professionals protections that other professionals do not enjoy.”

For the full, detailed announcement, visit the Smith, Currie & Hancock website.

Shout-Out Credit:

Meade Collinsworth
Collinsworth, Alter, Fowler & French, LLC of Miami Lakes , FL
Email: mcollinsworth@caffllc.com / Phone: 305-822-7800

The most common refrain I hear when talking to clients about Contract Review and Administration is: “I only sign a standard contract.”

Most clients feel there is no reason for contracts to be reviewed prior to signing, because they only sign a standard contract. Unfortunately, the only standard contract I ever see is one in which an owner or client uses and wants their consultants and contractors to sign. Ironically, one of the few things that makes any contract a “standard contract”…is the omni-present and onerous broad hold harmless/indemnity and defense clause.

Contract Review and Administration is probably one of the most important aspects of a prudent risk management and loss prevention program. A contract that any Contractor or Consultant signs should identify their rights and responsibilities to the owner and third parties. All of this should be determined at the “request-for-proposal” stage. If done here…it allows the Contractor or Consultant to identify, evaluate and treat the risks in the Owner or Client standard contract. Please remember that no one is putting a gun to the Contractor’s or Consultant’s head when he or she signs the contract; so it’s absolutely essential that the Contractor or Consultant knows what he is signing and what his rights and responsibilities are when negotiating for future work.

The prudent Contractor or Consultant should discuss all contracts with their counsel and agent before signing. Some general practice tips to consider when reviewing contracts are:

  • Scope of services: Think about whether the contract is exactly what you thought is was going to be in terms of encompassing more or less services, added responsibilities or services outside your area of expertise. It is also wise to describe things you are not doing to reduce the potential for misunderstandings.
  • Change orders: Find out if the Owner is allowed to change the scope of work once under way, and, if so, under what conditions. For instance, look at what input or options you have and what time frame you have to consider this.
  • Warranties and Guarantees and Performance Standards: First, you have to know if there are any. Try not to assume any and don’t agree to unreasonable ones…if you must assume any! Don’t forget that all professional liability policies exclude the assumption of liability policies which turns out to be a warranty or guarantee or performance guarantees.
  • Compliance with all laws, regulations, etc.: These responsibilities can be difficult to live up to since no one knows what all the laws, regulations, ordinances, rules, etc. are, much less how to comply with all of them. Continue reading “Is there such a thing as a Standard Contract?”

Since its founding in Florida in 1988, Insurance Office of America (IOA) has added more than 20 branch offices across the country. Today, IOA is the largest privately-held agency in Florida and one of the fastest growing agencies in the U.S. At its National Sales Meeting in Orlando last month, the company appointed a/e ProNet Member John Tenuto as a Regional President of IOA.

Tenuto is Senior Vice President and Managing Partner of IOA Insurance Services, and he is the Branch Representative of the San Diego office, which he opened in 2005. Tenuto was appointed to the IOA Board of Directors in 2010, and this latest move by IOA places him in the position of Regional President over all IOA’s offices on the west coast.

Tenuto began his insurance career in 1985, developing his expertise at a number of prominent brokerages in both Northern and Southern California, including HRH, Barney & Barney, and Dealey, Renton & Associates. He also founded Tenuto & Associates Insurance Services in 1994, which was acquired by HRH in 2001. His practice focuses on providing his clients with property and casualty insurance products and various risk management services. Tenuto specializes in representing design and construction related firms.

“We are at a place in our company’s life where it makes sense to have more local leadership,” said IOA Chairman and Founder John Ritenour in last week’s announcement. “John is a huge asset to IOA and really cares about what we are building out west.”

Congratulations, John! And good move, IOA!