Transcript Slide 1 - McGraw Hill Higher Education

Essentials Of Business Law
Chapter 30
Professionals’ Liability
McGraw-Hill/Irwin
Copyright © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
Professionals
Person who performs work requiring special
education, experience, and knowledge
 Specialized work poses great risk of personal injury
or financial loss to others
 May need to pass a state-administered examination
and gain accreditation, certification, or a license
 Architects & engineers
 Health care providers
 Attorneys
 Accountants
 Insurance agents & brokers  Financial planners
Essentials of Business Law
Chapter 30-2
Malpractice
A specific type of negligence lawsuit in which a
professional is the defendant
A professional’s improper or immoral conduct in
the performance of duties
 Carelessness
 Lack of knowledge
A claim of negligence must prove:
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Duty
Breech
Proximate cause
Damages
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Chapter 30-3
Liability Of
Health-Care Providers
Physicians, can be found negligent for failure to:
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Render a correct diagnosis of a patient’s condition
Order appropriate tests
Prescribe appropriate medications
Render an accurate prognosis
Inform a patient of the risks involved in a particular
treatment or surgery, or of other alternatives available
Psychiatrists, can be found negligent for:
 Not warning third parties if a patient intends to do
harm to them
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Liability Of
Health-Care Providers
Nurses, can be found negligent for:
 Incorrectly administering prescribed medications
 Failure to properly monitor a patient’s condition
Pharmacists, can be found negligent for:
 Dispensing drugs other than those specifically
prescribed
 Incorrectly dispensing drugs that cause injury to the
legal user
 Dispensing multiple medications, that when taken
together, cause injury
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Liability Of Accountants
Liable to clients and third parties when
they fail to:
 Observe standards for their profession
causing clients or third parties to suffer a loss
 Discover or conceal evidence that a client’s
employee has been embezzling funds
 File appropriate and timely tax returns
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Liability Of
Financial Planners
Liable to their clients when the client relies on
their recommendations and suffers a loss
Churning
 Excessive buying or selling of securities to generate
commissions
Unauthorized trading
 Exceeding authority as agreed to by contract
between the financial planner and the client
Unsuitability
 Recommendation of investments that conflict with the
client’s particular situation, needs, and desires
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Liability Of
Financial Planners
Fraud or misrepresentation
 Intentional or negligent misstatement or nondisclosure of a material fact relating to an investment
Transfer of account problems
 Deliberately obstructing the client’s desire to transfer
one or more accounts to another professional
Failure or delay in processing
 Neglect in complying with the client’s wishes to
purchase or sell securities in a timely fashion
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Liability Of
Architects And Engineers
Architects and engineers are liable if their
negligence results in:
 Injury to parties with whom they have
contracted or to third parties
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Chapter 30-9
Liability Of Attorneys
An attorney is liable to a client if he or she
fails to:
 Exercise due care in handling a client’s affairs
 Act in a timely fashion in filing claims
 Properly investigate matters related to a
client’s case
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Liability Of
Insurance Agents And Brokers
An insurance agent or broker is liable to a
client if he or she:
 Fails to recommend appropriate insurance and
the buyer suffers a financial loss
 Fails to recommend the right kind of insurance
to protect against a specific type of loss
 Fails to recommend appropriate amounts of
coverage
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Reducing Professionals’
Risk Of Liability
Liability insurance
Attend training sessions to help reduce the
risks that lead to negligent actions
Continuing education
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Chapter 30-12