What Owners Need To Know About Florida Statute §558.0035

Effective July 1, 2013, Florida Statutes Chapter 558 was amended to provide a “safe harbor” to individual design professionals for claims of negligence. Specifically, Florida Statutes §558.0035 states that any design professional “who is employed by a business entity or is an agent of a business entity is not individually liable for damages resulting from negligence occurring within the course and scope of a professional services contract.” Florida Statute §558.0035 also expands the definition of “design professionals” to include geologists in addition to architects, interior designers, landscape architects, engineers and surveyors.

These changes are limited to individual design professionals only, not business entities, and the statute covers only economic damages. The new law does not limit claims for personal injury or property damage. It is also worth noting that §558.0035 will not limit professional negligence claims by parties who have no contract with an individual design professional and/or his or her design firm. The statute does not state that any of these changes are retroactive.

Previously under Florida law, individual design professionals employed by design firms were potentially individually liable for professional negligence, even where the contract for professional services was only between the design firm itself and a property owner. The rationale for originally allowing claims against individual design professionals was based upon the design professional’s violation of his or her duty of care to those who may be foreseeably injured.

Now, §558.0035 could significantly limit the types of claims an owner might be able to bring against individual design professionals, provided certain conditions apply. In order for Section 558.0035 to limit liability for professional negligence claims, all five of the following conditions must be met:

1. The contract is made between the business entity and a claimant or other entity to provide professional services to the claimant;
2. The contract does not name as a party the individual employee or agent who will perform the professional services;
3. The contract includes a prominent statement, in uppercase font that is at least 5 point sizes larger than the rest of the text, that, pursuant to this section, an individual employee or agent may not be individually liable for negligence;
4. The business entity maintains any professional liability insurance required under the contract; and
5. Any damages are solely economic in nature and the damages do not extend to personal injuries or property not subject to the contract.

Additionally, the Florida Legislature amended Fla. Stats. §471.023(3), §472.021(3), §481.219(11), §481.319(6) and §492.111(4), to specifically include the limitation of liability contained in Fla. Stat. §558.0035. By incorporating Fla. Stat. §558.0035 into these other statutes as well, a design firm remains liable, up to the full value of its property, for the acts or omissions of its employees, but the individual employees themselves are protected from personal liability if the conditions of Fla. Stat. §558.0035 are met. These changes could potentially limit how much an owner may be able to recover for its claims for design defects or professional negligence.

The statute also places the burden on purchasers of professional design services to negotiate contracts that contain sufficient coverage for potential claims. As a result, property owners, community associations and developers contracting for design services are now burdened with trying to assess the potential liability of the professional design firm.

These issues illustrate just a few of the reasons why owners, associations and developers should consult with a qualified construction attorney before entering into a contract for design services.