Professional Liability—Contractor Clause Samples
The Professional Liability—Contractor clause establishes the contractor’s responsibility for damages or losses resulting from professional errors, omissions, or negligence in the performance of their contractual duties. Typically, this clause requires the contractor to maintain professional liability insurance, covering design errors or faulty advice provided during the project. Its core function is to allocate risk by ensuring that the contractor is financially accountable for professional mistakes, thereby protecting the client from potential losses arising from such issues.
Professional Liability—Contractor. The Contractor shall maintain professional liability insurance (including without limitation for sprinkler and/or fire protection and other design-build work included in the Work) without design- build exclusions with limits not less than as identified in the following table: Up to $50,000,000 $1,000,000 $2,000,000 More than $50,000,000 $2,000,000 $4,000,000
10.3.7.1 The professional liability policy shall have an effective date on or before the date that the Contractor first started to provide any Project-related services.
10.3.7.2 Upon submission of the associated certificate of insurance and at each policy renewal, the Contractor shall advise the Contracting Authority in writing of any actual or alleged claims that may erode the professional liability policy’s limits.
10.3.7.3 The Contractor shall maintain the professional liability insurance in effect for no less than 5 years after the earlier of the termination of the Contract or Substantial Completion of all Work.
10.3.7.4 If the Contractor is not authorized under Applicable Law to directly provide professional design services, the Contractor may satisfy the requirements of this Section 10.3.7 by providing a contractor’s professional liability insurance policy.
10.3.7.5 If the Contractor is a joint venture:
(1) under which the individual joint venturer is the insured and (2) that covers that joint venturer’s interests in the joint venture by endorsement or otherwise. The certificate of insurance shall reflect that the PL policy covers the joint venturer’s interest in the joint venture. Example: Assume that the Contractor (1) is the “XY joint venture” of company “X” and company “Y”; and (2) is required under Section 10.3.7 to maintain PL insurance limits of $1M/$2M. In order to comply with Section 10.3.7.5.2, “X” must maintain PL insurance limits of $1M/$2M and “Y” must maintain PL insurance limits of $1M/$2M.
10.3.7.6 If the Contractor is a limited-liability company, which members consist of two or more separate firms: