Short answer
Subconsultants and 1099 architects generally need their own professional liability insurance, because your policy covers your firm’s liability and doesn’t usually extend to the people you hire. Whether an independent contractor who stamps under your name is covered depends on how your policy defines “insured.” Check that definition and ask your carrier before anyone stamps.
Do subconsultants need their own professional liability insurance?
A Colorado architecture firm asked us whether engineering firms it occasionally subs work to need to match its limits. Our answer was that 1099s and subcontractors should carry their own coverage, and that the firm’s professional liability coverage doesn’t extend to other subs it hires.
Your policy typically responds to your firm’s liability, including liability that may arise from the work of subs you retain. That is different from insuring the sub. The sub’s own policy responds to the sub’s errors. Ask each sub for a certificate of insurance showing professional liability, and confirm it before work starts.
What limits should subconsultants carry?
Some firms ask subs to match their own limits. Others set the limit by the risk of the sub’s scope. Many firms also pass along their client’s requirements through a flow-down provision, so the sub carries what the prime contract demands.
There is no single right number. Weigh the sub’s scope, the fee and what your client’s contract requires, and have your attorney review the subconsultant agreement.
Are 1099 architects covered when they stamp under your name?
A firm asked us: “If we have an IC who is an architect and they stamp with their license… our coverage covers them, right?” The honest answer is that it depends on the policy.
Policies define who is an insured. Some definitions cover employees only. Others may extend to independent contractors acting on your behalf, sometimes with conditions. Forms vary a lot, so we can’t say yes or no without reading yours. Check the definition of insured, and ask your carrier before the contractor stamps anything.
If the carrier says the contractor isn’t an insured, requiring that person to carry their own professional liability is a common alternative. The contractor’s policy would then need to be in place and confirmed.
What about a separate office or a foreign drafting office?
A California corporation used a separate drafting firm in another country. The carrier said this was fine if the drafting firm was formally retained as a subconsultant with its own professional liability. The carrier also noted that the policy insures the California entity, and the foreign entity itself would not be an insured.
That was one carrier’s answer for one policy. The general point is that separate entities aren’t insured unless they are named on the policy. The named insured list shows who is actually covered, so check it when you work with an affiliated or outside office.
Example: an independent contractor architect
Consider a hypothetical engineering firm that hires an independent contractor architect to stamp a small project under the firm’s name. Before the work starts, the firm sends its policy to its broker and asks how the policy defines “insured.”
The carrier says independent contractors are not insureds under that form. The firm asks the contractor for a certificate showing their own professional liability and adds the requirement to the agreement. The project starts with the coverage question settled.
What to check before you hire a sub or 1099
- How your policy defines “insured,” and whether it mentions contractors
- Whether the sub or contractor carries their own professional liability
- A current certificate of insurance from each one
- The limits your client’s contract requires, and whether they flow down
- Whether the sub is retained formally, with a written agreement
- Whether an affiliated or outside office appears on the named insured list
Send us the contract for a check before the work starts.
Related questions
Does my professional liability policy cover my subconsultants?
Generally it covers your firm’s liability, not the sub itself. Subs usually need their own coverage.
Do my subconsultants need to match my limits?
Not necessarily. Many firms set limits by the sub’s scope and flow down their client’s requirements.
Is a 1099 architect covered by my policy if they stamp under my name?
It depends on your policy’s definition of insured. Check it and ask your carrier first.
Is a foreign drafting office covered by my policy?
Usually only if it is named as an insured. A formally retained subconsultant with its own coverage is a common approach.