Standard of care refers to a professional's duty to act reasonably and provide quality services. If you fall short of the standard of care, a client usually has the right to sue.
In many industries, the standard of care is commonly determined by the action or inaction a reasonable, professional person with similar training would take in a similar situation under similar conditions.
The standard of care can vary drastically across industries and professions. In some cases, a professional organization defines the standard. Other times, it’s determined by the typical behavior of professionals in the industry. Either way, having specialized knowledge and training usually means a higher professional liability standard of care.
It’s a heavy burden that can increase your risk for lawsuits and makes insurance for professionals essential.
A reasonable person is used to explain the law to a jury in court proceedings. There's no technical definition, but generally, you can expect that a reasonable person:
Consider what you would expect from another small business providing the same services you offer. These are the same standards you should hold yourself to. Professionals must meet certain levels of quality and service in their practice to avoid professional liability lawsuits.
You may be familiar with malpractice, which is the medical standard of care. This determines if a healthcare professional was negligent while treating a patient. But your small business may have a professional liability standard of care, too. In other words, given your industry, your clients can probably expect certain things when they work with you.
For example, your clients can reasonably expect your business to:
Provide promised services. Say you're an IT consultant, and you guarantee a client that the system you install will improve network performance. If you fall short, your client could sue because you didn’t deliver on your promise.
Complete your work. Imagine you're an architect, and your client needs a wheelchair ramp added to their home. However, you have a difficult time coordinating with contractors and accidentally let the project fall off your radar. Your client, who was entitled to a finished ramp, may sue.
Deliver accurate, mistake-free work. Say you're an accountant who takes on new clients during tax season. Unfortunately, the extra work leaves you a bit overwhelmed and you make a mistake on a client's tax return. That client may sue, alleging it's standard practice for accounting professionals to double-check their work.
Any number of simple snafus can escalate into an expensive liability lawsuit. A professional liability insurance policy can protect your business from the cost of these claims, but managing your client's expectations might help prevent lawsuits from the start.
Consider taking additional precautions, such as:
Clear communication lets your clients know that you're working to uphold your profession's standard of care.
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