Get Professional Liability Insurance Coverage
Who needs professional liability insurance?
What does a professional liability policy cover?
Professional liability insurance is a policy created for professionals like accountants, lawyers, and physicians against claims of negligence made by clients. Because general liability insurance does not protect professionals against business-related claims like negligence, malpractice, or misrepresentation, professional liability insurance is often required to fill in the gaps.
Professional liability insurance can be found under a variety of names, depending on the type of professional for which it is designed. For example, for medical professionals, it is called malpractice insurance. For real estate agents, it is called errors and omissions insurance. You should also know that professional liability insurance is not specialty coverage provided under the homeowner’s endorsements, in-home business policies, or business-owner’ policies. This type of insurance only covers claims made during the policy period.
How Professional Liability Insurance Works:
It is important that you know how professional liability insurance works before deciding if it is the right choice for you. More often than not, professional liability insurance policies are arranged on a claims-made basis. This just means that only the claims made during the policy period are covered. The average professional liability insurance policy will protect the insured from loss caused by claims made during the policy period due to covered errors, omission, or acts of negligence committed by the insured party in a business context. Some policies include a retroactive date, but in most cases, claims made before the policy begins are not covered.
Make sure to read the contract. Professional liability insurance coverage does not include criminal prosecution or all forms of legal liability under civil law. Only what is listed in the policy is covered. Make sure to confirm whether or not cyber liability is included in your policy. Cyber liability covers technology-related issues like data breach and is not always included in the core policy. It is sometimes offered as a separate policy.
Reading the policy carefully is essential to finding the right professional liability coverage for you. Policies are all worded differently, for different reasons. Each policy has its own set of limitations. Luckily, policies use a similar, approved wording that is intended to make them easily comparable for customers. Some do not follow this, offering extremely different coverage. If you are not familiar with legal jargon, you might consider having your lawyer review your policy to make sure it is exactly what you are looking for.
Understanding the wording of the policy is so important, and small changes make a huge difference when it comes to what the policy covers. For example, coverage for “negligent act, error, or omission” is different than “negligent act, negligent error, or negligent omission.” The latter only covers error or omission when considered negligent, which is not in every case. Readers who lack the legal minds possessed by lawyers should bring in the second set of eyes so that they know from what they are protected.
All in all, understanding professional liability insurance is vital to getting the protection you need. If you need further assistance deciding what policy is right for you, contact us, and we will gladly assist you.