Vicarious liability arises from the common law doctrine of “agency law” and occurs when someone in a superior or controlling role is held responsible for the errors and omissions of their subordinates or agents.
This means that if you hire subconsultants to work on yours or your client’s project, you can be held vicariously liable for damages that arise as a result of their actions. Here are some actions you can take to help mitigate the risk of vicarious liability when working with subconsultants and ensure your project runs as smoothly as possible:
1. Determine the challenges that will arise
With any project, there will be challenges to overcome and problems that may arise, such as challenging geography on the jobsite or complex electrical and plumbing. What would need to be done to overcome these challenges, solve problems, and mitigate risk?
All possible solutions need to be brainstormed and discussed in meetings prior to selecting the final subconsultants who will be working on the projects.
Find out how these subconsultants plan to address and tackle these challenges. What solutions do they offer and/or what past experiences do they have in successfully navigating through these challenges?
2. Meet with them to find out their work history and experiences
Holding preliminary meetings with subconsultants to discuss challenges and how to tackle them is important, but this is also an opportunity to find out as much other crucial information about them as possible.
Other information such as their work history, relevant experiences, technical qualifications, design disciplines, client references, and history of claims/litigation are all important factors to consider.
Finding out as much information as possible will be beneficial in the long term in determining which subconsultants will suit your project needs the best which in turn, can help you mitigate the risk of vicarious liability from errors and omissions.
3. Negotiate and use mediation to solve problems
Should a dispute arise during the course of the project, is the subconsultant willing to use mediation to solve the issue?
Mediation is the best way to resolve disputes efficiently, effectively, and rationally. It can be the most effective way to ensure all parties are able to reach a common ground amicably.
Thus, negotiate with your subconsultants to include a mediation clause in the project contract so that any disputes will be first dealt with by mediation.
4. Make sure they have adequate insurance coverage
If a subconsultant makes an error or omission while delivering services on one of your projects, undoubtedly you will be named vicariously liable in the claim. However, the portion of damages you will be liable for will depend on the subconsultant’s available insurance limits.
Ensure that the subconsultant has adequate insurance limits that are suitable for the project at hand, otherwise, your own insurance will be paying the bulk of the damages.
You'll want to make sure that the subconsultants’ insurance coverage includes policies regarding things such as general liability, workers compensation, employer’s liability, and other coverages that fit their services and the client’s demands for the project.
Want to know more?
There are other ways you can further mitigate vicarious liability when working with subconsultants. Download our free guidebook “Avoiding Vicarious Liability from Subpar Subconsultants” here to find out:
