Professional liability insurance for architects and engineers.

Moonlighting: What’s the Harm?

Print this article

By on Jun 1, 2017 in All Topics, Newsletters, Operations |

Diane Mika, Vice President, Director of Risk Management Education, Berkley Design Professional

Consider this scenario: Moonlight_3An architect in your firm wants to design a home addition plan for a family member. Or this one: an engineer wants to take on a parking-lot project for a local non-profit organization she volunteers for. They may want the additional experience, income and/or recognition such moonlighting projects may bring.

You may think, As long as they do it on their own time, it’s no big deal, right? Not necessarily.

It’s not just the designer’s time that’s at issue. There’s a very real potential that your firm could be held liable in the event of a claim related to the moonlighting work.

Professional Liability Insurance

Your next question may be, But wouldn’t my firm’s professional liability insurance policy cover it anyway? Again, not necessarily. Typically, such policies specify that employees are covered—but only for those services performed on behalf of the firm.

Even if your PL insurance policy responds to such a claim, keep in mind that your firm would be responsible for any deductible. In either event, you need to ask yourself this: Do I want to be on the line for paying the cost of a claim on a project for which my firm received no income?

What Puts Your Firm at Risk

If a claim arises out of a moonlighting project, anything that implicates your firm’s involvement can result in imputed liability against your firm. Any of the following situations might imply that your firm was knowledgeable about and/or sanctioned such work:

  • Employee’s performance of moonlighting services during the firm’s normal work day or on the firm’s premises
  • Moonlighting employee’s use of your firm’s:
    – Equipment (computers, printers, scanners, plotters)
    – Software (design technology, other)
    – Email account domain
    – Telephone system or company-issued mobile device
    – Letterhead, logo or other standard documentation

What’s more, those who engage in moonlighting tend to be less seasoned employees. This lack of experience, when coupled with the lack of your firm’s normal QA/QC process, creates an environment that is ripe for a claim.

Protecting Your Firm

Many A/E firms affirmatively prohibit moonlighting activities by addressing it in the firm’s employee handbook and requiring employees to sign a form to indicate that they have read and understood its contents. You may also want to include a disclaimer of liability and, perhaps, an indemnity in the event an employee violates the policy. Be sure to enforce the moonlighting restriction, however, as inconsistency can lead to exposure.

In addition to putting your policy in writing and getting it formally acknowledged by your staff, include an actual dialogue about moonlighting during the onboarding and training of new employees. Also consider discussing the topic at an all-employee meeting. Such interactive conversations can help your staff more fully understand the risks of moonlighting—to themselves and to the firm—and help you dispel the myth that there’s no harm in moonlighting.

Final Words of Advice

A design professional cannot be an effective firm leader and, at the same time, engage in moonlighting activities. Leaders, in particular, need to devote 100% of their professional energy to the firm.

Lastly, if you choose to allow non-leadership staff to moonlight, you should place key restrictions on such activities:

  • Cannot be performed on the firm’s premises
  • Cannot be performed on the firm time
  • Cannot make use of any of the firm’s equipment, software or material

© 2017 Berkley Design Professional. All rights reserved.


Berkley Design Professional (Berkley DP) specializes in professional liability insurance products and services for design professionals. Our mission is to offer the right combination of products and services that help design professionals improve and protect their businesses

About W. R. Berkley Corporation—Berkley DP is a member company of W. R. Berkley Corporation, a Fortune 500 company. W. R. Berkley Corporation is an insurance holding company that is among the largest commercial lines writers in the United States and whose insurance company subsidiaries are rated A+ (Superior) by A.M. Best Company. www.wrberkley.com

Products and services are provided by one or more of insurance company subsidiaries of W.R. Berkley Corporation. Not all products and services are available in every jurisdiction, and the precise coverage afforded by any insurer is subject to the actual terms and conditions of the policies as issued.
Information provided by Berkley Design Professional is for general interest and risk management purposes only and should not be construed as legal advice nor confirmation of insurance coverage. As laws regarding the use and enforceability of the information contained herein will vary depending upon jurisdiction, the user of the information should consult with an attorney experienced in the laws and regulations of the appropriate jurisdiction for the full legal implications of the information. Practice management recommendations should be carefully reviewed and adapted for the particular project requirements, firm standards and protocols established by the design professional.

For more information, contact:
Andrew D. Mendelson, FAIA, Senior VP and Chief Risk Management Officer
AMendelson@BerkleyDP.com

Diane Mika, VP and Director of Risk Management Education
DMika@BerkleyDP.com