Personal liability for professional negligence

I’m reviewing different firm legal structures, and noticed that basically all of them state that partners/owners/principals “may be personally liable for their own professional negligence.” How do firms deal with this? Do architects have to purchase their own personal professional liability insurance? What’s the point of having personal asset protection through an LLP, LLC, Corporation, etc. if you can’t be assured that your personal assets won’t be protected?

Hi Amim, thank you for your question. I can share our company structure how we are set up at the firm I work for. We are set up as a LLC with two members/owners that are not licensed. I am the only licensed professional/architect on staff, but I am an employee of the firm, not an owner or member. We have less than 10 employees. I will also say that different states have different requirements so I would check your local jurisdiction. All that said, my firm purchased a professional liability policy for errors and omissions that covers and protects the LLC., therefore, I would not be personably liable, only work completed under the LLC. If I was set up as a sole propietor or PLCC, then my personal assets would not be protected. Since I am an employee of the LLC, this is the key difference, so that my personal assets are protected versus a PLCC or sole propietorship would make me (and my personal assets) personably liable and a higher risk. It would be worth referencing Table 5.1 Summary of Legal Structures in The Architect’s Handbook of Professional Practice as well.

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