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Design professionals score win in California

man wearing blue suit jacket beside woman with gray suit jacket

Design professional firms in California scored a legislative victory when Senate Bill 920 was signed into law. Photo by rawpixel.com on Pexels.com

California architects, engineers, and land surveyors can continue to organize as limited liability partnerships thanks to the work of the AIA California Council (AIA CC) and ACEC California, with assistance from Victor O. Schinnerer & Company.

Senate Bill 920, signed into law by Governor Jerry Brown on July 20, 2018, extends the sunset date of this law to January 1, 2026. The law authorizes persons licensed to engage in the practice of engineering, land surveying, or architecture to form registered limited liability partnerships and foreign limited liability partnerships if specified conditions are met. Existing law requires engineering and land surveying partnerships to provide security of no less than $2,000,000 and architecture partnerships to provide security of no less than $1,000,000 for claims arising out of the partnership’s professional practice.

Schinnerer was happy to support this legislative effort by providing claims data that allowed AIA CC and ACEC California to argue successfully that the existing required level of security was sufficient and did not need to be increased.

A limited liability partnership (LLP) is a general partnership in which partners are afforded protection from certain types of partnership liabilities. The liabilities from which an LLP partner is protected vary greatly from state to state, but generally, LLP partners are not liable for the tortious actions (e.g., negligence, professional malpractice) of other partners. Partners are not, however, protected from their own tortious actions or from certain types of partnership liabilities. Unlike an LLC, an LLP may not protect a partner from personal liability for some debts of the partnership, such as those caused by breach of contract.

For more information about how the legal form of your practice, including sole proprietorships, partnerships, corporations, and limited liability companies or limited liability partnerships, may affect your professional liability exposure, watch our webinar on “The Legal Liability of Design Professionals” or read our article, “Forms of Practice” (access is limited to current policyholders and brokers).

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