A Closer Look at Your Reporting Requirements
All professional architects and engineers risk having claims brought against them in relation to their work. Some claims may have merit. However, some professionals can get caught in a wide net cast by a claimant trying to recoup unexpected losses, regardless of actual fault. Notwithstanding the frivolity of a claim, once a case settles or a judgment is rendered, you may be obligated by your state to report the settlement or judgment to your professional board.
Some states have rules which require licensed professionals to self-report settlements and judgments. Professional liability (PL) insurance carriers have similar requirements in some states, which could make it easy for your state regulators to spot an architect or engineer who fails to self-report. In some states, even the court rendering the judgment or settlement must report it to the state board.
For example, the state of Colorado requires insureds and insurers for architects and engineers to report any malpractice claims, which are settled or in which a judgment has been rendered against the insured, within 90 days of the settlement or judgment.1
Licensed professionals are also subject to a self- reporting requirement for malpractice claims within 60 days of settlement or judgment in claims related to their services. In fact, under Colorado Statutes governing engineers, surveyors, and architects, the failure to report a settlement or judgment may be grounds for disciplinary action2 and punishable by a fine of up to $5,000 for each violation.3
In California, the Business and Professions Code imposes a similar reporting requirement. The California Code varies from the Colorado statute, stating that architects, engineers, and surveyors must report any settlement or administrative action to the board only if the value of the settlement is $50,000 or greater.4 Professionals must report judgments and arbitration awards if the award is valued at $25,000 or greater.5
A licensed professional’s requirements will vary from state to state, and it is important for all architects and engineers to become familiar with their state board’s rules.
Some states do not have settlement reporting requirements while in other states, self-reporting must be done using specific forms. A licensed professional’s requirements will vary from state to state, and it is important for all architects and engineers to become familiar with their state board’s rules.
Unfortunately, claims and lawsuits against architects and engineers for malpractice or professional negligence are common. Just remember: once a claim is resolved, your responsibilities might not be at an end. It is essential to know the rules and requirements of the state who issued your license in order to avoid the unnecessary pitfall of failing to report a settlement or judgment.
1State of Colorado, Department of Regulatory Agencies, Division of Insurance, Bull. No. B-5.17, Reporting of Malpractice Claims Against A Licensed Architect Or Corporation Or Partnership Or A Group Of Persons Practicing Architecture (2007).
2Colo. Rev. Stat. § 12-25-108(1)(k) (2014).
3Colo. Rev. Stat. § 12-25-108(4)(a) (2014).
4Cal. Bus. & Prof. Code § 6770(a)(3) (2008).
5Cal. Bus. & Prof. Code § 6770(a)(4) (2008).
