In the 2013 Legislative session, the Legislature has amended Chapter 558 of Florida Statutes to provide protection for design professionals. Senate Bill 286, which has been signed into law by the Governor, will be effective July 1, 2013, initially expands the definition of “design professional” to add “geologist” to “architect, interior designer, landscape architect, engineer and surveyor”, and limits liability on such professionals.
The Bill adds a new Section 558.0035 of Florida Statutes, providing that a design professional employed by a business entity (or agent of the business entity) will not be individually liable for damages resulting from negligence occurring within the course and scope of the professional services provided under certain specified circumstances. The circumstances necessary are that (a) the business entity has a contract between it and the claimant (e.g., an association), or another business entity for the provision of services to the claimant; (b) the contract does not specifically name the individual employee that will perform the professional services as a party to the contract; (c) there is a prominent statement, in larger uppercase fonts, that an individual employee of the business entity may not be held individually liable for negligence; (d) the business entity maintains professional liability insurance required under the contract; and, (e) any damages are only “economic” in nature, expressly excluding personal injuries or property not subject to the contract.
Associations that are engaging in contracts for services with the types of individuals who fall within the definition of “design professionals” after July 1, 2013, and particularly with a Florida business entity (expressly defined in the Statute to mean a corporation, limited liability company, partnership, limited partnership, proprietorship, firm, enterprise, franchise, association, self-employed individual or trust), should be certain that the contract is thoroughly reviewed relative to the liability issues of the employees of the entity providing services and that appropriate insurance coverages are in place. (It is important to be aware that a self-employed individual is considered a “business entity” for the purposes of this new Statute.) While the business entity will remain liable to the association for negligence, the extent of such liability will be limited to the assets of that entity, if any, and/or any insurance policy in effect during the project.