When design documents are interpreted to be a product produced by the design professional and then replicated, the design professional may not be protected by professional liability insurance coverage. In addition, product design is subject to more than the common law negligence standard and may fall under the strict liability standard for damage caused by the design.
The firm may also be exposed to class action type lawsuits, which can easily erode a limit of liability on the design firm's professional liability insurance policy.
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Clients must understand the limited scope of services performed, and realized the possibility of the third party claims to help protect the company from frivolous lawsuits design. Your contract should include the following:
Compensation and keep harmless clause for the claims of the user or buyer. Provision of compensation should be stated that the professional design, to provide services for prototypes, can be subject to various claims meritless of potential users or buyers.
It is natural that any use of the information without verifying the professional design and adaptation to changing codes, standards; site conditions or other factors must be at the sole risk of the client. Moreover, it is not realistic that the client must defend and indemnify professional design for all claims, costs, loss, or damage to the professional design resulting from the use of information.
Limitations of this design the company's liabilities. Please note that this applies only between the parties of the contract and, therefore, third party claims will not have a limitation of liability.