What Is Professional Negligence?

What is professional negligence?

Professional negligence occurs when an industry professional doesn’t properly fulfill their duties or obligations. Although negligent acts are usually accidents, any resulting harm could lead to massive lawsuits stemming from someone’s failure to carry out their responsibilities appropriately. Medical malpractice is an example of professional negligence. 

When professionals take on work, they’re expected to exercise “reasonable care” in carrying out their duties. Reasonable care means that others in the same situation would take specific actions to ensure a positive outcome. Mistakes can happen when someone doesn’t adhere to reasonable care, which can result in professional negligence.  

What professions are vulnerable to negligence?

Certain industries are more prone to negligence cases. However, negligence can happen in nearly any service industry. Those who provide professional services are often held to high standards and can be sued when problems arise. 

These are some of the most common professions that are vulnerable to professional negligence accusations: 

• Lawyer
• Insurance broker
• Accountant
• Architect
• Doctor
• Realtor
• Financial advisor

However, other service providers should also protect themselves against negligence claims. These include the following professions: 

• Dietitian
• Physical trainer or therapist 
• HVAC installer
• General contractor
• Teacher
• Tutor
• Counselor
• Veterinarian

Professional negligence is covered by professional liability insurance, sometimes known as errors and omissions (E&O) insurance. This insurance provides a legal defense and pays the claims up to policy limits for professional negligence. 

Examples of professional negligence

There are many examples of professional negligence that happen every day. “Given the open and generally permissive nature of our legal system, it is difficult to avoid professional malpractice claims,” said Eric A. Inglis, partner and co-chair of the litigation department at Schenck, Price, Smith & King LLP. 

Even well-intentioned professionals can sometimes face allegations of negligence, so it’s essential to understand what constitutes a breach of duty in various fields. 

“Professional negligence is essentially when a specific kind of professional is expected to provide a certain standard of care/service, yet they fail to meet that standard, and as a result, some kind of harm befalls their client,” said Ben Michael, attorney at Michael & Associates. For example, professional negligence can occur “if an accountant calculates a client’s taxes incorrectly, which results in financial losses for that client,” Michael explained.

Here are a few other common examples of professional negligence:

Example 1: A surgeon performs the wrong procedure.

A surgeon performs knee surgery on someone’s right knee instead of the left. This is an example of a common negligence incident that has led to many lawsuits. Now, as part of their pre-op procedures, surgeons meet with the patient and confirm the surgery type and location. They use a Sharpie to mark the surgical spot, with the patient watching to ensure it’s correct. 

Example 2: A trainer teaches the wrong exercise form.

Another example of professional negligence is a physical trainer who’s sued because a client hurt their back when performing an exercise the trainer taught them. The trainer taught and reinforced poor form in the exercise, leading to the client’s injury. This is professional negligence because physical trainers are expected to know and teach the correct form.

Example 3: Stairs collapse in a house.

A general contractor builds a house. The staircase later collapses due to a structural error, damaging the home and injuring the homeowner. General contractors are expected to do work that meets safety standards, and an oversight could result in a lawsuit for professional negligence.

Example 4: A tutor says a student will get into an Ivy League school.

A tutor boasts about how their students always get accepted to Ivy League schools and promises that with their help, the new client will, too. This claim sets high expectations when, for many reasons, there’s no guarantee any student will gain admittance to an Ivy League school. Essentially, the tutor shouldn’t set inappropriate expectations, as they could lead to professional negligence accusations.

Factors in determining professional negligence

Insurance companies, legal teams and courts consider several factors when determining whether professional negligence occurred. They want to know precisely how the professional may have failed to exercise reasonable care.

“Because there are various different professions in which professional negligence can be applicable, the specific factors that determine whether or not it occurred can vary,” Michael said. “Also, determining those factors is very important. … Just because a bad outcome occurred for a client, that doesn’t necessarily mean professional negligence was the cause. For example, a lawyer losing their client’s case doesn’t necessarily constitute professional negligence.”

Here are the determining factors considered in professional negligence cases:

• Severity of harm: The harmed party must show a significant financial or physical loss. 
• Course of action: Could the professional have taken a different course of action to get a more desirable result? 
• Cost: What were the costs of various courses of action, and how would they have factored into the professional negligence incident? 
• Other options: If the course of action taken was the only course of action available, professional negligence might not be at play.

Often, the harmed party must provide ample proof to have a valid professional negligence case. For example, they may bring in expert testimony by other professionals in the field who can attest to industry best practices.

How to avoid claims of professional negligence

Professionals who provide services must avoid lawsuits and professional negligence claims at all costs. Fortunately, you can incorporate several crucial elements into your standard business practices to reduce the chances of someone accusing you of negligence.

Use comprehensive contracts.

When you start a new client relationship, create a contract that explicitly spells out the work you’ll perform and the relationship’s scope. Contracts don’t have to be full of legalese to be effective. State what you will do, how you will do it and in what time frame. List any exclusions or cases where the contract may be void based on the customer’s actions. 

“Among lawyers (and some doctors), it is called ‘practicing defensively,’” Inglis said. “Even if you know you are verbally communicating sound advice to your client, you put it in writing in case the client later denies receiving the advice.”

Many professionals use contract templates written by business lawyers as the basis of all project and client contracts. To complete the contract, you’ll need only a scope-of-project addendum. 

Contracts offer many benefits. For example, they “can be used by professionals, particularly like architects and engineers, to cap the amount of damages recoverable from them,” Inglis said. “Because professional negligence claims are expensive for plaintiffs to prosecute, if your contract limits the recoverable damages, then that can dissuade a plaintiff from suing you.”

Set realistic expectations.

Doctors can’t promise 100 percent healing. General contractors can’t guarantee to finish a project in record time. Tutors can’t promise that students will ace every exam.

Ensure that clients have reasonable expectations. Take the time to walk the client through what will happen throughout your working relationship, and set realistic goals. This way, you can prevent the kind of client disappointment that leads them to demand reparations. 

Communicate regularly.

Keep the communication channels open, and talk with your clients regularly throughout the project or job. The project’s scope may change due to an unexpected realization or occurrence. Professionals with clear and consistent communication are less likely to run into trouble with their clients. Clients must be assured that you’re fully committed to their project. [Read related article: What Does a Great Customer Experience Look Like Now?]

“For most professionals, the best way to avoid a professional negligence claim is by maintaining good communication with your client,” Inglis said. “The lawyers who get sued are the ones who do not return client phone calls. Often, the doctors who get sued have poor bedside manners. Similarly, memorializing your activities or communications are a great way to protect yourself.”

For example, say a general contractor agrees to renovate a house based on an expected budget and timeline. When the contractor demolishes the part of the house that must be redone, they encounter mold issues. While this is unpleasant news, they would call the client, review the problem immediately and offer solutions.

Maintain excellent records.

If you’re involved in a professional negligence claim, the more documentation you have that shows you took reasonable care, the less likely the claim will go anywhere. Keep detailed notes of client meetings and phone calls. Have clients initial or sign off on any project’s change of scope. These measures will eliminate the “he said, she said” back-and-forth that happens with such allegations. 

Talk with other professionals.

Learn from others to help protect yourself. Speak with industry peers, and attend industry conferences or professional development classes. You’ll stay abreast of what’s going on in the industry, learn what others do to protect themselves, and get an idea of how to react when negligence claims occur. 

How professional liability insurance can protect you

Professional liability insurance isn’t required in all professions. For example, some states require doctors to have it, but it’s not typically required for physical trainers. Still, even if professional liability insurance is not required, it can be an excellent idea. Consider your industry and options. Many professionals in industries with lower lawsuit risks can get a professional liability insurance policy at a reasonable rate.

Professional liability insurance is for instances when someone files an insurance claim or lawsuit stating you didn’t perform your job professionally. It’s different from general liability insurance, which covers you from third-party accidents, such as slip-and-fall scenarios that have nothing to do with your job.

“Professional liability insurance is a great tool to give you peace of mind if you are sued,” Inglis said. “In addition, a lot of insurance carriers can provide resources or give you access to counsel before a potential claim matures into an actual lawsuit. 

“For example, sometimes a claim is preceded by a subpoena for the professional’s records,” Inglis explained. Rather than the professional responding to a subpoena on their own, their insurance carrier might offer subpoena coverage that will give the professional an attorney to work with on the response. “That advice could end up being the difference between being sued or not,” Inglis said.

The best liability insurance providers offer policies that provide a legal defense for your situation, including attorneys’ fees, expert witnesses and investigative services. They will also pay up to a policy’s limit for a settlement

Amanda Hoffman and Mark Fairlie contributed to this article.