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If you provide services for free, are you free from liability?

Judy Mendoza officeSome design professionals believe that if they receive no fee for their services, their liability is limited or nonexistent. This is not true. The general rule is that a professional performing voluntary service must do so in accordance with the same care and diligence as other professionals providing similar services. The lack of a fee does not reduce the obligation to use due care.

Professional liability insurance provides coverage for pro bono services that are performed on behalf of the insured firm. Professional liability coverage is the same even though no premium is calculated on the value of the free services provided. Just like any other adverse experience, claims resulting from such projects may jeopardize professional liability coverage or result in increased rates.

A firm’s exposure to the possibility of loss is decreased if the client for whom volunteer or pro bono service is being provided understands the risks faced by the design professional and agrees to waive any claims and protect the design professional from third-party claims.

As is always the case, no service should be provided without a written professional services agreement. Contractual provisions can be used to limit the risk of the design professional and the firm. The negotiated consideration exchanged for a waiver of rights or an obligation to defend or pay on behalf of the firm is the firm’s voluntary professional services. This bargaining of services for a release and an indemnification obligation should be part of the negotiation for the services. Firms should also have a clear policy in place that addresses pro bono services.

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  1. Pingback: Providing services in emergency situations | Schinnerer Risk Management Blog - March 16, 2015

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