The term Professional Negligence is used very often, but not all of us know what it exactly means. Your construction company provides work and services in exchange for payment.

The law says that your work as a contractor must be undertaken with care and diligence. But things can (and often do) go wrong.

Are you Liable?

Dissatisfied clients lay claims against contractors for bad workmanship. It happens everyday across the United States. You are aware that this happens. In fact it has probably happened to yourself or someone you know.

But, did you know that you can protect your business from the financial implications of this kind of claim?

The construction industry is not the only one bound by these professional liability laws. They also apply to professionals like accountants, investigators, financial advisors, architects, and consultants.

Acts of professional negligence include carelessness that affects the quality of the work you deliver.

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Examples of Professional Negligence in Construction

Some examples of how things can go wrong:

• A survey or failing to detect subsidence, prior to investing in a property resulting in considerable rectification costs for the owners.
• Professional accountants and tax advisors fail to inform the client of new changes in laws resulting the client in breach of official laws.
• A investment consultant misrepresenting the facts about particular stocks causing losses to the investor.
• A professional valuer undervaluing a property, resulting in financial losses on the part of the seller.
• Defrauding the employer by collusion with sub-contractors.

Checklist of Your Responsibilities

You could find yourself facing professional liability claims for the following reasons:

• Breaking the rules.
• Non-compliance with applicable laws and standards of work.
• Failing to serve the clients’ best interests.

6 Legal Clauses your Contracts MUST Include

General contractors owe an obligation to produce work that mapplicable standards and desired quality of the client. Normally, the work standard is defined in a written agreement. This contract also sets out the scope of work.

The initiating point for any dispute about construction work is the document of contract between employer and contractor. This is why it is important that your contracts should always include:

1. The scope of the work involved
2. The labor cost
3. The construction materials
4. Bills of quantities
5. Time deadlines for the completion of project
6. Late penalty clauses for over-running on the project and the work
7. standards required

Contractors and Professional Negligence: a Short Case Study

Construction projects are difficult to predict. For instance:

A general contractor represents their business as one with both experience and skills in the field of construction. Because of this, the business is hired for the construction of a 15 story building. It must be completed within a year.

The Trouble Starts

The contractor runs behind schedule, and realizes they will have to get in some sub-contractors otherwise the job won’t be finished in time. track. So the contractor hires sub-contractors.

Unfortunately the sub-contractors do a bad job. The standard of work does not meet the quality standards of the work in progress.

The owners are held responsible by legal authorities for breach of laws. This results in the demolition of the building. Is the contractor liable for the sub-contractor’s bad worksmanship?

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You’re in Deep

Yes, you are. It is normal for the general contractor to hire sub-contractors. There are many companies who have experienced workers to do the work better than you. However, it is the duty of general contractor to oversee and monitor the activities of sub-contractors.

In this example, the general contractor’s negligence has resulted in the client incurring a heavy financial losses. In such circumstances there would be very strong case of professional negligence against the general contractor. The owners can (and will) pursue a claim of damages against them.

Could this happen to you?

Professional Liability Also Includes Fraud

Fraud may suspected on the grounds that the contractor deliberately misrepresented the quality of work. It must be proved that the contractor had no intention of carrying out the design and specifications as agreed.

Professional negligence is based on proving the contractor represented something as true, but had not factual information to believe the representation to be true.

Know Your Rights

If you find yourself in similar situation, having sustained financial losses, you may be legally entitled to initiate a negligence claim to recover the damages suffered. However, there are expert law firms that can help you to sort out whether you have a real claim of negligence.

Professional negligence is a diverse and bit difficult term to define because it incorporate a diverse range of fields of expertise and a number of different and unique situations.

Many factors are taken into the context while determining whether the general contractor is guilty of professional negligence.

How to Protect Your Contracting Business

Professional Liability Insurance, sometimes called “errors and omissions coverage” is designed to defend and pay claims against actions taken that stem from your professional capacity and training.

Because we are construction insurance experts, we know the pressures you face. Professional liability shouldn’t be another thing to worry about. Give us a call. We’re here to help.

Every general contractor needs to protect their business from professional negligence with contractors liability insurance. To get a same day insurance quote click here.

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1. Hire Right and Take Care of Your Employees

If your company is busy enough to need an extra set of hands, then you know how important it is to hire qualified, professional employees. Hiring competent employees is key to expanding your business, however it is not enough to simply hire right; you must prioritize your employee’s wellbeing to improve retention and productivity. Keeping your employees happy includes protection from risks and damages. The best way to protect your employees, and yourself as a business owner, is to provide the security of adequate electrical contractor’s insurance coverage and worker’s compensation. Electrical contractor’s insurance and electrical liability insurance can provide coverage for your employees in the event of an accident of any kind on the jobsite and give them the peace of mind that they are working for a responsible employer.

2. Offer Quality Service

Quality employees result in quality service. If you are serious about growing your business, you need to ensure you consistently render quality service to your clients. Satisfied clients can help you win repeat business and referrals, both of which are extremely important for expanding your business. Many clients appreciate, if not require, proof of electrical contractor’s insurance in order to sign off on a contract. Providing proof of insurance not only demonstrates to clients that you are a responsible electrician, but also demonstrates a high level of accountability and respect for your company as well as their property.

3. Guard your business

Growing your business also demands that you are able to protect what you already have. You should therefore ensure you safeguard your business with necessary coverage against injury and property damage claims. Without sufficient insurance coverage, expanding your business exposes you, your employees, and your clients to many more risks and potential pitfalls. As your business expands, your electrical contractor’s liability insurance will likely need to broaden its scope as well. More projects and more employees will require greater coverage and term limits.

4. Broaden your network

It is important that you broaden your business network. People who know you can help you get more jobs, and by providing professional employees and high-quality work you are likely to get a referral from past clients. As in any industry, networking within your community can be extremely beneficial for growth and contractors, including electricians, often see a significant rise in clients through networking and referrals. However, networking does not necessarily need to come from recommendations alone. Many potential clients are searching the Internet for contractors and electricians, therefor it is worth investing in your business’s online profile. Facebook and Yelp are among the most popular sites, but it is important to ensure the information is up to date and to ask clients to leave your company a positive review. If you can build a website and advertise on Google, you may be surprised at how many inquiries you will receive.

5. Reach out to Potential Clients

While it may be true that many clients seek electricians and not vice versa, if you are proactive in your search for clients you should consider taking your business to potential customers. You may be able to find clients on job boards and hiring sites, some of which are specific for electricians. By reaching out to clients you are indicating dedication to your business and determination to grow, especially by proving your credibility with reviews and proof of electrical contractor’s insurance. Additionally, contacting potential clients makes the search for an electrician easier on them and demonstrates your commitment to prioritizing your relationship with your clients.

6. Manage Contacts Effectively

An organized and efficient system is important to maintain your clients and business contacts. Using a single database system will help you stay in contact with past clients and stay relevant in their minds for future projects. Additionally, having contacts in the contracting business is helpful to expand and connect your company to others in the industry. If a peer’s client asks them for an electrician referral, staying connected in the industry can boost the likelihood of getting recommended by another contractor. If you manage your contacts effectively and can give quality recommendations to your clients, you will likely get a recommendation in return.

7. Check on Clients

Building rapport with your clients often requires reaching out to your past clients. Clients will appreciate you asking for feedback and checking in after the completion of a project for any issues or concerns. By staying in contact and making it clear to your client that you care about the lasting quality of your work, you will likely get repeat business and referrals. It is possible that an issue with a completed project is brought up when you reach out to a client, however this does not need to detract your credibility. Proving you care about the quality of your work will make you stand out as an electrician, and having electrical contractor’s insurance will protect your business, your integrity, and your finances.

8. Stay Updated

It is important to be familiar with technological advancements in the industry. This will improve your chance of getting more contracts and broaden the services your company can provide. Newer construction projects often are incentivized with sustainability options, including LEED certifications. Understanding the electrical patterns of various structures and standards will expand the types of electrical systems you are able to work on, from much older buildings to newer structures. Along with staying up to date with technology, staying updated on your electrical contractor’s insurance is important as well. You must know for certain what is and is not covered by your policy and update your coverage as needed.

10. Communicate

Establishing close communication with clients, other contractors, and your employees is key to successfully expanding your electrical contracting business. All the previous tips can be tied back to communication. Whether it be within your company, within your network of contractors, or with your clients, effective communication will prevent dissatisfaction and accelerate your business. If an accident were to occur, establishing a healthy and communicative relationship with your client ahead of time can mend the situation drastically more efficiently and you can expect to leave your clients and employees happy with your handling of the problem.

11. Learn From Mistakes

You may occasionally have a dissatisfied client, unhappy employee, or an insurance slip up. Many of the mistakes are unavoidable, however learning what caused a slip up can help prevent an upsetting situation from occurring again. While your insurance policy cannot provide coverage for an angry customer, errors in infrastructure or wiring that occur due to your mistake or not can be fixed by having an electrical contractor’s insurance policy. You do not want to have to learn this by paying out of pocket for an accident that would have been covered by your insurance policy as the ramifications could be tremendous to your business.

We hope you find these tips useful for the growth of your electrical contractor’s business. While there are a limitless number of ways to expand your business, we hope you can let us at Contractor’s Liability provide you with adequate insurance coverage to protect your clients, your employees, and your business. To learn more about electrical contractors insurance, click here for a free quote or call us at (866) 225-1950.

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