PROFESSIONAL LIABILITY INSURANCE
Dependent on the contract employee's scope of services and supervisory
responsibilities, the nature of errors/omission liability coverage
must be critically reviewed as to the impact on the employee, the
employer and other parties affected by the services to be performed.
may reasonably expect the employer's corporation has appropriate
Professional Liability or Errors/ Omission insurance coverage for
their areas of operation. However, this situation can vary considerably
in various private and public organizations. Contract employees
and independent contractors should determine potential exposure
to liability and analyze requirements accordingly.
professional liability insurance is deemed to be required, on either
of a continuing or project-defined basis, the contract employee
should explore the possibility of being added under the liability
insurance of the client, if available. This method may be more accessible
to a contract employee than to an independent contractor.
required to independently obtain professional liability insurance,
the contract employee should endeavour, in the contract with the
client, to normally limit liability to one of the following:
value of fee
· % of construction cost of work contract
· amount of coverage in effect
· direct damage.
commercial liability insurance coverage is not available to the
individual, the professional should include clauses in the contract
agreement that clearly and fairly reflect the level of contractual
liability being assumed by each party.
employee should not assume unlimited liability for any and all claims
which may arise out of the service supplied, and should make sure
that contract terms are explicit in outlining liability limitations.
scope of services contract is desirable. Oral or purchase order
style contracts should only be considered with caution. The contract
should also define coverage requirements of the contract employee
and/or employers following termination of contract but prior to
professional liability limitations. Assistance in contract form
and language is available from professional liability insurers and
organizations such as Association of Consulting Engineers of Canada.