TIPS FOR AVOIDING LIABILITY
1.Insist on a written fee agreement.
Always create fee agreements with your clients. The fee agreement should include information regarding the rate at which you will be paid, who will be responsible for costs, if you charge for mileage, scope of work to be completed, copying, phone calls, etc, and the conditions under which the relationship may be terminated by either party. A sample fee agreement is attached to these materials.
2.Make a paper trail.
Always keep a file of all letters and correspondence between you and the client. Whenever possible, you should communicate with your client in writing and should keep copies of all correspondence. It is also important to keep job notes and job file site descriptions. This applies to email, faxes, and telephone messages as well. Also be careful to keep all correspondence received from the client in your file so that you have easy access to it in the event you need it in the future.
3.Keep records of time spent.
If your fee agreement provides for billing on an hourly basis, keep written time sheets clearly describing the work done and the time needed to complete the work. Keep these sheets on a daily basis, and provided the client with copies of the itemized bill, including the description of what work was performed on a specific date. If expenses are to be incurred, identify whether there is a limit or ceiling at which you will obtain approval from your clients.
4.Accurately record your work.
Take and keep data sheets, sketches, photographs and videotapes of the work that you do on the property. In environmental work, the conditions may change and it will be difficult if not impossible to document that you acted properly under the conditions that existed at that time. Taking photographs of the site and videotape of the work done will be a valuable resource for proving that your recommendations and wetland delineations were correct when you made them.
5.Insist that the client sign a liability contract.
Create a contract with the client, enunciating in clear terms who has the liability for the work being done on site. Often, there will be many subcontractors working on the same site. Clearly state in the contract that you will not be liable for the mistakes or incompetence of the other subcontractors involved. Also, address the issue of attorney’s fees. Clearly state that the owner of the property will be responsible for your attorney’s fees in the event that you prevail in a claim for collections, professional malpractice or other matters.
6.Keep detailed and organized records.
Keep clear and accurate records of the information you relied upon when making your conclusions and reports. If relying upon the expertise of third parties that are not under a separate liability contract with the owner, make sure that you are comfortable with their conclusions before relying on them to be error free.
7.Record the results of the testing completed.
The procedure you used to reach your conclusion must be well documented in notes, data sheets or sketches. It is critical that you can prove that you acted in accordance with the professional standards, and that you performed all testing reasonable under the circumstances. In order to protect yourself in the event of a professional malpractice complaint, keep a clear record of the tests you performed, the manner in which you performed them, and the results you obtained by performing them. For example, what characteristics did you find to determine the wetlands? Soils? Vegetation? etc.
8.Keep the client informed and up to date.
Provide the client with copies of all results of all tests and results as soon as you receive them. Discuss the results with them and explain to them what the results mean. If the client appears doubtful of your results, encourage them to seek a second opinion.
9.Officially conclude the business relationship.
At the conclusion of the business relationship, send a closure letter to the client, stating what was done, the results of said work, and your recommendations to your client. Clearly indicate at this time that your business relationship is concluded. Refund monies due to the client, if any, or enclose a final bill for services rendered.
10. Obtain insurance coverage.
Maintain sufficient errors and omissions and general liability insurance coverage at all times to meet the specific needs of your business. Consider the possible liabilities included in your line of work and what the potential damages may be if a client were to succeed on a Professional Malpractice claim. As your business grows, increase your coverage appropriately to provide for adequate protection.
11.Maintain all licenses/ Remain active in your trade association.
Be sure to keep your licenses, certifications and memberships current and up to date. Remain active in your trade association, and keep current on new laws and standards. If required to participate in continuing education, keep a detailed record of all programs, seminars or courses attended.
12.Incorporate.
Incorporate your business to protect yourself, your family and your personal assets in the event that you are sued for Professional Malpractice or other matter. By registering with the Secretary of State as a Corporation, Limited Liability Company you can reduce your personal exposure, and also gain certain tax advantages. You should, of course, meet with your own private or legal advisor to review the pro’s and con’s of each type of entity to determine what entity will best serve your needs.
13.Hire an attorney and an accountant.
Hire a qualified attorney and an accountant to represent you and your business on an ongoing basis. Your attorney and accountant should be familiar with the different aspects of your business and should be ready to competently address any issues that may arise in a prompt and efficient manner. Meet with your attorney ahead of time to ensure that when a problem arises, you will have an attorney ready and able to assist you.
Disclaimer: None of the information contained herein shall be construed as a direct recommendation or as legal advice of McGrath Law Firm
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