Limits of Liability Clause

In my mind I'm thinking the "limits of your liability" are plainly stated in your policy. And in the event of any litigation, the contractual limits of your liability could be proven to be far greater that what you stated. Liability limits would be great if you could get your client to agree to only hold you liable for no more than a specific amount. Good luck getting that to fly.

And for what it's worth, I would avoid an indemnification clause like the plague...unless you're meaning the client provide you with indemnification.

SWAG, post: 329245, member: 1364 wrote: How many of you guys have a limits of liability and or indemnification clause in your written contracts?
In getting quotes for new E&O insurance it has been indicated that I can get a significant premium reduction if I add this and or an indemnification clause to my contracts. I was also wondering if you feel these clauses ever cost you business you would have otherwise received.

We have a standard clause which limits our liability to our fee - this is allowable in my state. The big firms we deal with won't accept it so we have a backup that limits it to whatever our insurance company will pay.

I have used limit of liability clauses and have lost some business in the process. As long as my insurance company gives us a break, I will have it in my my contract. Most people never notice it. Had an attorney who wanted to take it out. Our policy was for $2M. The project was $1,500. After our discussion, I decided that I would need at least $2M to work with him. Some people recommend 2.5 times fee. Some try to limit it to the fee. My understanding is that the courts will generally not consider the clause in awarding damages. Once again as long as the insurance company gives me a break, I will put it in the contract. It may not reduce liability; however, it reduces premiums.

paden cash, post: 329252, member: 20 wrote: In my mind I'm thinking the "limits of your liability" are plainly stated in your policy. And in the event of any litigation, the contractual limits of your liability could be proven to be far greater that what you stated. Liability limits would be great if you could get your client to agree to only hold you liable for no more than a specific amount. Good luck getting that to fly.

And for what it's worth, I would avoid an indemnification clause like the plague...unless you're meaning the client provide you with indemnification.

Yes the indemnification would be from them to me.

I get title commitments weekly which state that the attorney that prepared the commitment is liable for no more than his preparation fee. I do not see why this would not work for surveyors. Since I rarely perform single surveys on one contract for more than 20k, even If I put in the contract that I could not be held liable for 3x the fee it would still be a significant reduction in financial exposure and I would still gain the premium reduction.

lmbrls, post: 329270, member: 6823 wrote: I have used limit of liability clauses and have lost some business in the process. As long as my insurance company gives us a break, I will have it in my my contract. Most people never notice it. Had an attorney who wanted to take it out. Our policy was for $2M. The project was $1,500. After our discussion, I decided that I would need at least $2M to work with him. Some people recommend 2.5 times fee. Some try to limit it to the fee. My understanding is that the courts will generally not consider the clause in awarding damages. Once again as long as the insurance company gives me a break, I will put it in the contract. It may not reduce liability; however, it reduces premiums.

Courts in Arizona HAVE to accept indemnification clauses. An engineering firm here (within the last 10 years) won a lawsuit based upon an indemnification clause limiting their liability to their fee. It is now case law here. I have heard that it has been unsuccessfully appealed at least twice, although I have no proof. Our E&O carrier approves of it, so we use it!

In Arizona couts can NOT accept idemnification clauses unless someone else is to blame. See Arizona Statutes 32-1159

aliquot, post: 329362, member: 2486 wrote: In Arizona couts can NOT accept idemnification clauses unless someone else is to blame. See Arizona Statutes 32-1159

Not so... that statute merely states that liability can not be completely eliminated. Our contract does not state thet there is NO liability, it merely caps the liability at our fee...

See this

And this

The court actually said that the clause in the contract was enforcable because it was NOT an idemnification clause. Liablity can be limited by contracts but idemnification clauses are not valid by state statute.

The court actually said that the clause in the contract was enforcable because it was NOT an idemnification clause. Liablity can be limited by contracts but idemnification clauses are not valid by state statute.

aliquot, post: 329515, member: 2486 wrote: The court actually said that the clause in the contract was enforcable because it was NOT an idemnification clause. Liablity can be limited by contracts but idemnification clauses are not valid by state statute.

You are correct - I mistakenly mingled indemnification into my posts, when I was speaking solely about limitation of liability.

SWAG, post: 329245, member: 1364 wrote: How many of you guys have a limits of liability and or indemnification clause in your written contracts?

Don‰Ûªt know what the majority of your Surveying services consist of. I only work with large corporations that ask for price(s) and then send me THEIR Contract. It contains (demands) liability limits along with all the other goodies. You either acquiesce or do not do business.

My only recourse as to lowering the EO insurance cost was to raise my deductible to the maximum I could afford.

B-)