A contract that promises perfect work is asking for something no policy will insure.
Professional liability answers for negligence, which means falling below the standard of care a competent professional would have met. When a client contract promises the highest standard, or guarantees a result, it has quietly asked you to take on a duty your insurer never agreed to cover.
Build the practice file Read the short answer firstThe policy answers for falling short.
A promise of results is not negligence.
One adjective can move the whole duty.
Why does the standard of care matter in my contract?
Because it sets the line your work is measured against, and professional liability cover is written around that line. Meet the standard and there is no negligence. Promise more than the standard and the extra part is a contractual duty rather than an insured one.
In British Columbia that line is not vague. Engineers and Geoscientists BC states that registrants “are required to stay informed of, knowledgeable about, and meet the intent of all applicable standards, policies, plans, and practices”, and that each practice guideline “establishes the expectations and obligations of professional practice”. Departing from a guideline is allowed, but the regulator expects the reason to be written down.
The dangerous words are short ones. Highest. Best. Ensure. Guarantee. Fit for purpose. Each of them lifts the duty above what a competent professional would have done, which is the only thing the policy was priced to answer for. Ask for the clause to say you will perform with the reasonable skill, care and diligence expected of a professional in the same discipline. That sentence is insurable. The other version usually is not. Read Engineers and Geoscientists BC on professional practice guidelines (opens in a new tab).
Four clauses worth reading twice.
The standard of care sentence
Look for reasonable skill and care. Anything stronger is a promise you are making personally rather than one your insurer joined you in making.
Fitness for purpose
A guarantee that the result will work is a warranty, not a professional duty. Warranties are one of the most common reasons a professional claim is declined.
The indemnity
An indemnity can commit you to losses well beyond your own negligence, including a client’s own share of the fault. Read what it covers before agreeing a limit against it.
Departures you have documented
Where you have stepped away from a guideline on purpose, write down why at the time. The regulator expects it, and it is also the record that defends the decision later.
Three practices, three signed contracts.
The word highest
A single adjective in a client template raised the duty above the professional standard. Nobody negotiated it, because it read like ordinary contract language.
The promise that it would perform
The design met the standard and the building still did not hit the target the contract had guaranteed. The claim was about the guarantee, not the design.
The undocumented departure
A sound decision to depart from a guideline, made for good reasons, with nothing written down. Two years later there was nobody left who remembered why.
The questions practices ask before signing.
The client will not change their template. What now?
Many will change that one sentence when it is explained, because they want you insured rather than exposed. If they truly will not, at least go in knowing which part of the contract your policy does not stand behind.
Is fit for purpose really uninsurable?
It is a warranty of a result rather than a duty of care, and professional policies are written around the duty of care. Treat any guarantee language as something to negotiate out.
Does this apply to sub-consultants too?
Yes, and it flows both ways. What you promise your client should not be more than what your sub-consultants have promised you, or you carry the difference.
What should I keep on file?
The signed contract, the scope, and a written note of any deliberate departure from a guideline with the reason. Those three documents answer most of what a claim will ask.
Can insurance cover a contractual duty at all?
Sometimes a policy will answer for liability you would have had anyway, even if a contract also states it. What it will not do is pay for a promise you took on that goes beyond negligence.
Two that sit next to this on the same site: how professional liability limits work, and the clause that outruns the policy.
Not the question you had? Send the clause and a licensed person will read it with you. Use the short contact form.
Negotiate the sentence, not the claim.
Five minutes on the standard of care wording before signing is worth more than any argument about it afterwards.