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Limitation of Liability for Design Professionals

On April 24, 2013 the Governor approved Chapter 2013-28, Committee Substitute for Senate Bill No. 286, amending the provisions of Chapter 558, Florida Statutes (the Construction Defect Statute) to take effect on July 1, 2013. These changes impact persons acting as “design professionals” as well as those parties in the construction arena contracting with or otherwise relying upon the performance of “design professionals”.

Florida Statute 558.002(7) was amended to include within the definition of a “design professional” geologists, along with the previously identified professions of architect, interior designer, landscape architect, engineer and surveyor.

Florida Statute 558.0035(1) was created to provide for contractual limitations on liability of “design professionals” employed by a business entity or an agent of the business entity. Under the new law, such persons are not individually liable for damages resulting from negligence occurring within the course and scope of a contract for professional services if (1) the professional services contract is between the business entity and the claimant or the professional services contract is between the business entity and another entity for the provision of services to the claimant; (2) the contract does not name as a party to the contract the individual employee or agent who will perform the professional services, and (3) the business entity maintains any professional liability insurance required under the contract. In order for “design professionals” to gain the benefit of this new limitation on individual liability, the professional services contract must contain a prominent statement, in uppercase font that is at least 5 point sizes larger than the rest of the text, that “[P]ursuant to F.S. 558.0035, an individual employee or agent may not be held individually liable for negligence.”

One limitation of the new law is that the contractual limitation of individual liability under F.S. 558.0035 only applies if the claimed damages are solely economic in nature and do not extend to personal injuries or property not the subject of the contract.

In addition, F.S.558.0035(2) was created to define a “business entity” for purposes of F.S. 558.0035 as any corporation, limited liability company, partnership, limited partnership, proprietorship, firm, enterprise, association, self-employed individual, or trust, whether fictitiously named or not, doing business in Florida.

Whether you are a “design professional” or a party contracting with or relying upon the services of a “design professional”, if you have any questions regarding these changes in the law and how they may impact your business, please contact the attorneys at Knott Ebelini Hart to speak in further detail. We look forward to the opportunity to be of assistance to you and your organization.
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April 24, 2013

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