Governor Brown recently signed legislation to extend the sunset date on the law that allows architect, engineering and land surveying firms to organize as Limited Liability Partnerships (LLP).
The AIA California Council and ACEC California jointly sponsored the legislation, SB 920, by Senator Anthony Cannella (R-Ceres).
Only five professions in California are allowed to organize as LLPs: architects, engineers, land surveyors, accountants and attorneys. The law for architects, engineers and land surveyors included a sunset date of January 1, 2019, meaning the law would expire at the end of this year if SB 920 was not introduced, passed and signed. SB 920 extends the sunset date by seven years, to January 1, 2026, and passed the Legislature without a single “No” vote.
Most importantly, SB 920 extends the sunset date without increasing the level of professional liability insurance LLPs are required to carry. Architectural LLPs are required to carry professional liability insurance of at least $1,000,000 to $5,000,000, depending on the size of the firm. Engineers and land surveyors are required to carry at least $2,000,000 to $5,000,000. The AIACC and ACEC California were confident the LLP law would be extended. Our main objective was to extend the law without an increase in the required professional liability insurance coverage. To accomplish this we worked with two large insurers to obtain claims data that allowed us to successfully argue the current insurance requirement was adequate and did not need to be increased.
The LLP is a viable option for many architectural firms, and the AIACC is pleased to be able to preserve that option for the architectural profession.