Warranties or Guarantees – Contract Tip of the Week

Jan 12, 2017Risk Solutions

Q: How do warranties or guarantees affect the standard of care?

A:  Warranties or guarantees often go beyond the normal standard of care required in performing professional services. They may obligate you as a design professional for damages beyond those that are proximately caused by your negligence in the rendering of your professional services, and this may create a potentially uninsurable obligation. It’s important to keep in mind that any contractual assumption of liability that would not exist in the absence of a contract is not insurable under RLI’s professional liability insurance policy.

The Risk Specialty Group and RLI Design Professionals are pleased to feature our Contract Tip of the Week series. Each week, we’ll review a question submitted by a design firm relating to the subject of contracts. Keep in mind, though, that these discussions are general in nature and in making specific business decisions, it’s important to review your options with a knowledgeable attorney.

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Warranties or Guarantees