Including Sub Consultants on My Design Firms Professional Liability Renewal Application

The question of sub consultants on Professional Liability comes up quite often.  Why do they need to be included on the renewal application?

Your firm has vicarious liability for your sub consultants’ work.  Since your firm holds the main contract on the project the liability is going to be with your firm.  You sub consultants are hired by your firm and paid through your firm and therefore your firm holds that liability.  This is the reason the insurance companies ask about sub consultants on the renewal application.  Even if it wasn’t your firm’s work that caused the error or omission, it may have been one of the sub consultants you hired, this is vicarious liability.

The key point to keep in mind that if your firm is sued due to the error or omission of the sub consultant this still puts your firm and your firm’s insurance company in a position that they will need to defend the claim.  In many cases if the claim is due to the sub consultant the insurance company may go to that sub consultants insurance company for recovery.  Always make sure that your sub consultants do have Professional Liability coverage in case this type of situation presents itself.

Due to the vicarious liability the insurance companies require the information on the billings and the types of sub consultants your firm is hiring.  It can seem frustrating that the billings of your subs are taken into consideration on the application but it is reviewed different than the direct billings that your firm receives.  It is important that your firm reports the sub consultant billings accurately on the renewal application.

If you have questions about the renewal application, sub consultants and billings please be sure to call or email your Professional Underwriter agent.