Vicarious Liability for Subconsultants

If a firm has professional liability insurance from CNA, its policy defends the firm against allegations of its
negligence and pays on its behalf if the firm or its employees are found to have performed professional services in a negligent manner and caused harm. Intrinsic in this broad coverage is coverage for the negligence of those providing services through the prime design professional. The CNA/Schinnerer professional liability insurance program provides coverage for the vicarious liability of the insured firm for the negligence of its consultants. Some other professional liability insurance policies will not cover such vicarious liability.
Subconsultants to an insured prime design professional should have their own insurance coverage. While the prime design professional’s CNA policy will protect it from the negligence of its subconsultants, the policy does not defend or pay on the behalf of the subconsultants. Therefore, if the subconsultants want protection for their professional practices, they must have their own professional liability insurance coverage. This coverage not only protects the subconsultant, it protects the prime design professional since the design professional should be able to look to its subconsultants to stand financially behind the services they provide. Even if a prime design professional’s policy pays on its behalf for its vicarious liability for the negligence of its subconsultants, the prime design professional has the right to bring an indemnity or contribution claim against the subconsultant for costs, losses and damages to the extent such damages were caused by the subconsultant.  A prime design professional is always responsible for the actions—including negligence—of those providing services through the prime design professional. Therefore, care should be taken in all cases to select interprofessional consultants who are qualified and capable of providing their services, who are insured or otherwise have the financial strength to stand behind their professional and contractual commitments, and who do not attempt to shift risk to the prime design professional by unreasonably limiting their liability to the prime design professional or a third party through their contract with the prime design professional.

For more information please contact your agent or you can email us at puimich@profunderwriters.com.

You can also visit the Victor O. Schinnerer & Company, Inc. Risk Management Site by clicking here.