{"id":891993,"date":"2017-04-20T10:51:19","date_gmt":"2017-04-20T16:51:19","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=891993"},"modified":"2017-04-20T10:51:19","modified_gmt":"2017-04-20T16:51:19","slug":"professional-best-efforts-part-2-reservation-rights-engineers-agree-best-efforts","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/professional-best-efforts-part-2-reservation-rights-engineers-agree-best-efforts\/","title":{"rendered":"\u201cProfessional Best Efforts\u201d Part 2\u2013 Reservation of Rights for Engineers who Agree to \u201cBest\u201d Efforts?"},"content":{"rendered":"<p>Melissa Dewey Brumback | <a href=\"http:\/\/constructionlawnc.com\/2017\/04\/13\/professional-best-efforts-pt2\/\" target=\"_blank\">Construction Law in North Carolina<\/a> | April 13, 2017<\/p>\n<p>Recently, a reader reached out to me to ask about case examples of\u00a0an engineer losing his insurance coverage because he\u00a0agreed to a \u201cheightened\u201d or \u201cbest\u201d standard of care. The reader stated that he was an insurance adviser who handled various construction professional coverages, and that in his experience it was very unusual to deny or limit damages because of a heightened standard of care.<\/p>\n<p>This comment led me to an informal survey of several insurance brokers that I deal with, and the general consensus is that instead of outright denying a claim,<strong> most E&amp;O insurers will issue a \u201creservation of rights\u201d letter.<\/strong> What that means is that the insurance company will defend the claim (i.e., pay for your lawyer to defend you and your Firm), but with the understanding that <strong>they are (potentially)\u00a0denying any liability for any adverse money\u00a0judgment<\/strong> against you.<\/p>\n<p>Inevitably, most such cases settle, but if they do not, the question then is <strong>whether the heightened duty created part of the damages<\/strong>. The insurer may ask to intervene in the lawsuit to ask the jury that question, in an effort\u00a0to limit its share of the damages.<\/p>\n<p>The reader commented that he could see two related insurance limitations: (1) where the professional agreed to be liable, and (2) where the professional refused\u00a0to consent to settle a claim. In such cases,\u00a0many policies contain a \u201chammer clause\u201d which limits the insurer\u2019s liability and defense costs to that which would have resulted had the insured accepted the settlement.<\/p>\n<p>While these are interesting fact situations to the insurance and\/or law geeks among us, for those of you who\u00a0would rather spend your days designing and engineering instead of in court,\u00a0 the best practice still remains the same:\u00a0 avoid agreeing to the highest professional standards. <strong>Being the \u201ctest case\u201d for a novel legal issue is not in your best interest<\/strong>.<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Melissa Dewey Brumback | Construction Law in North Carolina | April 13, 2017 Recently, a reader reached out to me to ask about case examples of\u00a0an engineer losing his insurance coverage because he\u00a0agreed to a \u201cheightened\u201d or \u201cbest\u201d standard of care. The reader stated that he was an insurance adviser who handled various construction professional&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/professional-best-efforts-part-2-reservation-rights-engineers-agree-best-efforts\/\">Continue reading <span class=\"screen-reader-text\">\u201cProfessional Best Efforts\u201d Part 2\u2013 Reservation of Rights for Engineers who Agree to \u201cBest\u201d Efforts?<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[9914],"tags":[9895,75,5767,214],"class_list":["post-891993","post","type-post","status-publish","format-standard","hentry","category-insurance-coverage","tag-advise-consult","tag-engineer","tag-reservation-of-rights-letter","tag-standard-of-care","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>\u201cProfessional Best Efforts\u201d Part 2\u2013 Reservation of Rights for Engineers who Agree to \u201cBest\u201d Efforts? 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