What Is Professional Liability Law?

Licensed professionals owe certain obligations to their clients. If a client sustained harm because of a professional’s negligence, they might be able to hold that professional legally liable through a malpractice claim. Professionals face malpractice claims when they fail to perform their job with due care and adequate competence. What constitutes malpractice depends on many different factors, including the required professional standard of care and the case’s specific circumstances. Since no two malpractice claims are alike, attorneys must handle them on a case-by-case basis, carefully assessing the specific facts and circumstances.

Here, you will find an overview of professional liability law. Consult with a qualified attorney if you have specific questions about a professional liability case.

What Must Be Proven in Liability Claims Against Professionals

Professionals in many fields could face a malpractice claim if their negligence causes a client harm. Malpractice claims are especially challenging for professionals because they face many different risks, from liability for their client’s damages to reputational harm and even professional sanctions.

Professional liability claims are always handled on a case-by-case basis. As a general matter, liability against a professional will be imposed if there is a finding of malpractice. Professional malpractice requires the following:

1. Negligence: Claims of negligence occur when a professional fails to fulfill the primary duties required by their profession. In other words, a professional is negligent when they provide substandard service to their client. What constitutes professional negligence can vary dramatically, from personal injury to medical malpractice. It could include anything from a lawyer missing a critical filing deadline to an architect approving a project with a glaring structural flaw.
2. Substantial Harm: Professionals are not liable for malpractice simply because they “should have done better.” Liability against a professional requires proving that a client sustained significant harm due to the services that they received.  This harm can include financial matters and property damage.
3. Causation: To hold a professional liable for malpractice, the client must prove that the professional’s negligent actions/inactions caused the harm they sustained. Without causation between the negligence and client damage, there is no professional liability.

All allegations of professional misconduct should be carefully investigated. An adverse outcome—poor result for the client—is not always professional malpractice. A professional is only liable for malpractice if their negligence caused the client to sustain actual harm.

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Types of Professional Liability Claims

Here is an overview of some of the most common types of professional liability claims:

Accountant Liability (Accounting Malpractice)

Accountants and other accounting professionals owe certain obligations to their clients. Accountant malpractice occurs when an error, omission, or other deviation from the Generally Accepted Accounting Principles (GAAP) causes actual harm to a client. Accountants found guilty of professional malpractice could face direct financial liability and sanctions from a licensure organization, such as the American Institute of Certified Accounting Professionals.

Financial Advisor/Broker Firm Liability (Broker Negligence)

Brokers, registered investment advisers (RIAs), and broker-dealers owe certain duties to their clients (investors). Depending on the circumstances, they may even owe a client a fiduciary duty, the highest standard of care under United States law. The Financial Industry Regulatory Authority (FINRA) is the self-governing body responsible for regulating the professional conduct of registered investment professionals. An investor may file a FINRA arbitration claim against a negligent broker or broker-dealer. Additionally, an investment advisor could face professional sanctions for negligence.

Engineering/Architectural Liability (Professional Malpractice)

Individual homeowners, real estate owners, businesses, and organizations rely on the professional services of engineers and architects. These professionals have a responsibility to serve their clients with proper care and adequate professional competence. If they fail to live up to the accepted standards of practice, they could face a malpractice claim. The American Institute of Architects (AIA) emphasizes abiding by the industry’s professional standard of care.

Lawyer/Law Firm Liability (Legal Malpractice)

Professional liability is also an issue for attorneys and law firms. Clients rely on lawyers for sound legal guidance. A lawyer who caused damage to a client due to substandard legal representation could be held liable through a legal malpractice claim. The American Bar Association (ABA) reports that four out of five attorneys will face a malpractice suit in their careers. Though, of course, not all of those claims are well-founded. A lawyer accused of malpractice could face disciplinary action from their state bar association.

Medical Provider Liability (Medical Malpractice)

Malpractice remains a significant issue in the medical industry. Physicians, medical specialists, and other healthcare providers could face a malpractice claim if a patient suffers harm due to substandard care. Once again, a medical professional or medical provider could be held legally liable for the damages sustained by the victim through a malpractice claim. Additionally, professional liability could result in professional sanctions—potentially even an investigation by a state medical board and the loss of a license.

What to Know About Professional Liability Claims and Licensing

No professional wants to be held legally liable for damage sustained by a client. Beyond any direct financial ramifications—out-of-pocket liability, increased professional liability insurance premiums, etc.—a malpractice claim could also jeopardize a professional’s license.

When a malpractice claim is filed against a professional, licensing & regulatory bodies often get involved and initiate their own investigation into the allegations. While one allegation of malpractice generally does not justify professional sanctions unless there is apparent wrongdoing, it can still harm a professional’s carry. These matters must always be taken seriously. A finding of malpractice could result in professional sanctions, suspension, or even the revocation of a professional license.

Complicated Insurance Issues Often Arise in Professional Malpractice Claims

Professionals who can be sued for malpractice should have malpractice insurance. Depending on the state, occupation, and structure of professional practice, a professional may be required to carry liability insurance. Though, in many circumstances, they are not legally required to carry malpractice insurance coverage. Still, as the risk of a professional liability claim is significant in many industries, licensed professionals should have adequate insurance coverage. All parties involved in a professional malpractice case should be prepared to handle insurance issues.

Finding the Right Attorney for Your Needs

It is essential to approach the right type of attorney—someone who can help you through your entire case. A strong attorney-client relationship can be hugely beneficial during such a challenging time. To help you get started, speak with a a lawyer who specializes in professional liability.