Everyday, architects, engineers, contractors and other design professionals face the prospect of being sued for the work they do on a project. Being sued is not only impactful financially, it also creates stress and worry that can affect your ability to do your best for other clients and projects.
Design professionals get sued not only when something goes wrong on a project, but even when your work is perfect and delivered just as you thought you had promised. There are a number of reasons these lawsuits can occur, but more importantly, there are ways you can avoid most of them before they happen. Read on to learn how to avoid being sued into your professional practice.
How to Avoid Being Sued
1. Set Realistic Expectations
Unrealistic expectations in terms of project outcomes, timelines, budgets and more can lead to disappointment, resentment and the filing of a lawsuit. Setting realistic expectations helps clients know what to expect.
Discuss with clients what challenges and difficulties may need to be overcome to complete the project. Avoid trying to shield clients from bad news. Inform clients promptly of any project issues that do occur. Provide a complete explanation of the issue including your professional assessment of the benefits and risks of proceeding according to the options available.
2. Understand Contract Risks
Poorly written contracts can be very risky for design professionals, especially when the pressure is on to agree to broad indemnification clauses in the client’s favor. You can minimize your risk of ending up in a lawsuit by scrutinizing contracts before you sign.
Know the limits of your professional responsibility, which is limited to the performance of your services as a design professional. Be on the lookout for indemnification clauses that ask you to assume liability that would normally fall under the client’s employer liability or worker’s compensation responsibilities. Understand that the wrong contract language could leave you exposed to excessive risk.
3. Practice Good Communication
Delayed responses, unreturned calls and ambiguous instructions can combine to make the perfect recipe for a lawsuit. Good communications are at the heart of productive client relationships.
Help clients feel informed with timely work development updates and acknowledgement of messages within 24 hours. Be sure to keep records to prove your good faith communication efforts, including copies of written correspondence and dated notes on telephone calls and in-person discussions.
4. Let Clients Own Important Decisions
There’s always a risk that a decision you make on a client’s behalf could slow or even derail a project completely. With the blame on your shoulders, a claim is sure to follow. Letting clients own important decisions reduces your risk of taking the blame for problems.
Realize that while clients hire you for your professional expertise and guidance, it’s the client who should ultimately make the decision on how to proceed. Always offer a thorough assessment of options, with benefits and risks of each, to empower the client to direct the project as much as possible.
5. Document Professional Advice and Decisions
Even when a client has made a decision on their own, there’s still a chance you could be blamed and face a claim if the decision causes something to go wrong with the project. Documentation helps protect you from becoming a scapegoat.
Keep a written record of all professional advice you provide to the client and the client decisions based on that advice. Be sure to document your recommendations against any unadvisable client choices in writing, even if you ultimately follow through on the client’s demands.
6. Avoid Conflicts of Interest
A client will sometimes file a lawsuit when it appears that you have favored your interest or the interest of another client over their own. Avoiding any appearance of a conflict of interest is the best policy to avoid a lawsuit.
Act in the best interest of each of your clients at all times and be mindful of how a client might perceive things differently than you do. Inform your client if a conflict of interest is possible and where it is necessary to withdraw from a project, take care to do so in the best way possible.
7. Stay Clear of Problem Clients
Problem clients come in many varieties, from deep-pocket clients with short tempers and unrealistic demands, to unsavory clients who pressure you to take unethical or illegal professional actions. It’s necessary to realize that some projects and clients may be more trouble than they’re worth.
Maintain a neutral perspective as you get to know and consider working for unfamiliar clients. Pay attention to unreasonable demands, unchecked emotions, unprofessional statements about past projects and designers, and requests that would be unethical or illegal. Avoid taking on clients who set off alarm bells and consider withdrawing from projects where problems are likely.
8. Avoid Suing Clients When Possible
A client countersuit is a very common response to a design professional suing a client for unpaid bills or other contract breaches. To lower your risk of being countersued, the best course is often to avoid filing a suit yourself.
Weigh the benefits and costs of a potentially long and difficult legal battle before proceeding. Consider not only the financial aspects involved, such as moneys owed, legal costs and insurance deductibles, but also added stress, time commitments and reputational consequences.
9. Handle Complaints Proactively
Every design professional eventually faces a complaint from a client, but how you handle the problem can determine whether the complaint ends up before a court of law. Handling client complaints proactively reduces your risk of a more costly lawsuit.
Be responsive whenever a client voices a concern about how a project is going. Find out what the issue is and what the client wants you to do to remedy the situation. Respond with a plan to solve the problem and continue moving forward, offering options and recommendations where possible.
10. Maintain Adequate Insurance
Proper insurance protection may not help you avoid being sued by a client, but it will help you avoid the worst outcomes that are possible if you are uninsured or underinsured. Having enough insurance to cover the cost of a robust defense, settlement and liability claims is a must for any design professional.
Make sure the professional liability insurance you carry offers limits to meet the risks you face as a professional. Realize that being underinsured can mean a claim may exhaust your policy and put your business and personal assets at risk.
At Lockton Affinity, we understand the needs of design professionals like you. You’ll benefit from risk management resources that can help reduce your risk of a claim, along with competitive coverage and prices and best-in-class customer service.
Receive an indication of what our coverage will look like for your business today by visiting LocktonAffinityA-E.com or call (888) 425-7011.