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Alabama Design Professionals: New Law Could Affect Your Contract Provisions for Liability

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Alabama SB261, which went into effect on July 1, 2021, affects design professionals in Alabama in many ways. Understanding how the new law can affect you and your business, and updating any existing contracts or policies to reflect this development, are important in shielding you or your business from professional liability. In this alert, we will review the impacts this law will have on design professional liability in Alabama.

The new law voids any contract provision that requires a design professional to:

  • indemnify or hold anyone harmless for damages other than damages caused by, or in proportion to, the design professional's own actions;
     
  • defend anyone against claims arising out of their professional services unless the claims are otherwise covered by their professional liability insurance; or
     
  • list another party as an additional insured under their professional liability policy.

It does not void any contractual provision for the "reimbursement" of an indemnitee's reasonable attorneys' fees, damages, etc. "in proportion to the design professional's liability."

The law also mandates the following standard of care for all contracts: "to perform the services with the professional skill and care ordinarily provided by a competent design professional practicing under the same or similar circumstances and professional licenses as expeditiously as is prudent considering the ordinary professional skill and care of a competent design professional." Any contractual provision providing a different standard of care will be void.

If you have any questions or concerns regarding this new law, please contact Kevin Garrison, Maia Fleischman or your Baker Donelson attorney.

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