Should my liability match the agency's client contract?

Agency flows down its own uncapped client liability to you? Ask for a cap tied to fees paid to you, not to the end client contract.

The risky clause

Subcontractor accepts the same liability to Agency as Agency owes its client under the master agreement, without any limit.

Why it is dangerous

Flow-down clauses pass the agency's client risk to you, but you earn a fraction of the client fee. Cap your liability at the fees you receive and exclude indirect loss, even if the agency's cap is higher. This is general information, not legal advice.

Safer clause to propose

Subcontractor's total liability is capped at the fees paid to Subcontractor under this agreement in the prior 12 months, regardless of liability limits in Agency's client agreement.

Message to send

Hi [Agency],

Could my liability be capped at the fees paid to me rather than flowing down your client's limits? That matches what I earn on the project. Thanks, [Your Name]

Frequently asked questions

What is a flow-down clause?

A term passing obligations from a main contract to a subcontractor.

Is a cap at fees paid reasonable?

It is common. Insurance can cover higher risk.

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