What’s in a Name?

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Why names matter on a professional liability insurance policy

By Cindy Russell
Assistant Vice President, Senior Claims Examiner, Berkley Alliance Managers, a Berkley Company

December 8, 2022

Let me introduce myself. My name is Cindy Russell; well, my full name is Cynthia Russell. Maybe you need to know my maiden name was Ellis. Why does all this matter? Depends on what you need it for: looking up my records at the doctor’s office (Cynthia Russell), if I’m calling the financial company that has my IRA (Cynthia Ellis Russell) or social media (Cindy Russell), for example.

For architects and engineers, it matters for insurance coverage, contract considerations and the name by which the public knows them.

A design professional liability insurance policy (and likely other types of policies) provides coverage for a specific firm name or names. If a claim is made against a firm name that’s not included on the insurance policy, coverage may not be provided for that claim.

Sometimes even a small difference has a big effect. For example, John and Julie’s Architectural Group is a Named Insured on a policy but it also uses the legal name of J&J Architectural Group in certain markets or maybe it used that name previously but changed it a couple of years ago. A claim is made against J&J Architectural Group and that claim is based on a project it took on under this alternate name or the prior name. However, this additional name wasn’t provided to the insurance broker (or the insurance company underwriter) so it’s not a Named Insured on the professional liability policy and because of this it may not have coverage for the claim.

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Why Your Contract Needs a Limitation of Liability Clause

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By Cindy Russell
Assistant Vice President, Senior Claims Examiner, Berkley Alliance Managers, a Berkley Company

March 10, 2022

News headlines: Architect pays $1 Million for Design Error on $15 Million Construction Project; Civil Engineer Tagged with a $250,000 Jury Verdict Because of Drainage Design Error – I could go on. Want to avoid your name in a headline like this? Include a limitation of liability clause in all your contracts (or as many as you can) and then the headline might read: Design Professional Only Pays $50,000 After $1 Million Verdict.

Contracts are a valuable tool for protecting design professionals when considering and agreeing to participate in projects. One way a contract can do this is by including a limitation of liability clause to manage the potential financial risks involved. However, note that the enforceability of this type of contract clause varies from state to state.

Some things to keep in mind when drafting a limitation of liability clause:

  • it should be reasonable (you’re unlikely to get a client to agree to a limitation of $10,000 when your fee is $500,000). The limit can be a specific dollar amount, equal to your fee or limited to the available limit on your professional liability policy;
  • it may need to be more visible than all the other contract terms and conditions (for example, underlined, bolded or a larger font), depending upon case law in the state governing the contract;
  • and the contract is strongest if signed by both parties (in some jurisdictions the contract and/or its terms and conditions may not be enforceable if it’s not signed).
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