During the 2023 legislative session, the Alabama State Legislature passed Act #2023-477, significantly impacting architects, engineers, and other design professionals in the state. Introduced by State Senator Clyde Chambliss, this bill aims to protect clients who may not be familiar with professional liability insurance policies and their coverage.

Signed into law on June 14, 2023, by Governor Kay Ivey and effective on September 1, 2023, the law states: “Before entering into a verbal or written agreement to provide services, a design professional, as defined in Section 41-9A-3(a), who is not covered by professional liability insurance, shall disclose that fact in writing to the client. The disclosure shall be signed by the client and notarized before the design professional may perform any work for that client.” Section 41-9A-3(a) defines a design professional as “a person or entity who is licensed or authorized in this state to practice architecture, landscape architecture, surveying, engineering, interior design, or geology.

Previously, design professionals were not required to inform clients about the existence or absence of their professional liability insurance. This left clients vulnerable, unaware of the risks of engaging a design professional without such coverage. The law is a step toward eliminating the risks associated with engaging an uninsured design professional.

The new law mandates that design professionals inform clients in writing if they are not covered by professional liability insurance, with the disclosure signed and notarized by the client before work begins. This promotes transparency, ensuring clients are aware of potential risks, especially those without the knowledge to ask about insurance proactively.

For uninsured design professionals, the law introduces an additional administrative step. They must provide the disclosure, secure the client’s signature, and have the client’s signature notarized before starting work. This may require changes in contract processes and initial client meetings. Uninsured design professionals must be diligent in documenting the disclosure to comply with the law, as failure could result in legal repercussions or unenforceable contracts.