Short answer
A standard of care clause can affect your professional liability coverage because many policies are built around the normal professional standard. Words such as “highest,” “best” or “guarantee” may raise what your firm promised. Some policies may exclude liability assumed by contract beyond what the firm would have had anyway. Policy wording decides what applies, and your attorney decides what the contract should say.
What a standard of care clause means
Design professionals are generally held to the care and skill other professionals would use in similar circumstances. That is the standard of care. It does not promise perfect plans. It promises professional, reasonable work.
Professional liability insurance is typically built around that standard. It often responds when a firm is alleged to have fallen short of it through negligence.
How a few words can raise the bar
Contracts sometimes describe services as performed to the “highest” standard, by the “best” firm, or say the design will “ensure” or “guarantee” an outcome. The AIA B503 guide for amending owner-architect agreements notes that words like “highest,” “best” or “most qualified” raise the standard the architect is held to. It adds that statements like these can be read as performance guarantees that may be uninsurable.
The engineering side says something similar. The commentary on the EJCDC engineering services documents, published by NSPE, ACEC and ASCE, explains that engineers cannot warrant or guarantee their work the way contractors can. Engineers commit instead to the care and skill used by others in the profession. You can find more at EJCDC.
Why a standard of care clause matters for insurance
Many professional liability policies may exclude liability a firm takes on by contract beyond what it would have had anyway. A promise to “guarantee” a result, or to perform to the “highest” standard, can fall into that gap.
If a claim relies on the promise instead of on negligence, the policy may not respond to all of it. Wording varies by policy, so your agent can explain how yours treats contractual promises.
Words to flag when you read a contract
- Highest, best, most qualified, first-class
- Guarantee, warrant, ensure, insure
- Certify
- “Comply with all codes,” when written as a promise and not as part of the standard of care
Example: the “highest standard” services clause
A small engineering firm receives an owner’s contract that says the firm will perform its services to the “highest standard” and “ensure” the design meets all requirements. The principal signs without a full legal review.
Later, the owner alleges a design problem and relies on those words. The firm reports the claim, and the insurer reviews whether the allegation rests on negligence or on the contract promise. Whether the policy responds to all, part or none of it depends on the wording and the facts.
This example is hypothetical. Coverage depends on the policy terms, exclusions and underwriting.
What to check
- Mark the words above and ask your attorney about them.
- Ask your agent how your policy treats contractual promises.
- Compare the language to a published standard form your attorney is comfortable with.
- Confirm whether your policy has a contractual liability exclusion and how it reads.
- Send the services section of the contract to your agent through the Insurance Requirements Check before you sign.
Related questions
Is “highest standard of care” always uninsurable?
Not always. It depends on the policy wording and the facts, which is why it is worth flagging before you sign.
Can I just strike the word?
That is a contract decision for you and your attorney. Your agent can explain why the wording matters to insurance.
Does a standard of care clause matter if my contract has a limitation of liability?
They address different things. A limitation of liability clause deals with how much can be recovered, while the standard of care describes the level of care you promised. Our article on limitation of liability clauses and professional liability pricing covers the first.