Professional Liability Insurance is Important Liability Coverage for Professionals
Also called Errors & Omissions, Malpractice, and Professional Indemnity Insurance; Professional Liability coverage helps protect you from claims of negligence, misrepresentation, or mistakes made while you provided services to a client. A customer who thinks you made an error that cost them money may decide to sue you. Even a baseless lawsuit will cost time and money to resolve, which is one reason why purchasing Professional Liability insurance is a wise investment.
Errors and Omissions coverage is important commercial insurance coverage for many professionals. It is designed for those in the business of giving advice professionally. Professionals and quasi-professionals may need to carry this coverage, including attorneys, design professionals, consultants, doctors, real estate agents, and many more.
Many Professionals Benefit From Having Professional LiabilityInsurance Coverage including:
- Architects
- Attorneys
- Accountants
- Consultants
- Counselors
- Engineers
- Environmental Consultants
- Insurance Agents
- Realtors
- Surveyors
- Therapists
- Many more…
Any professional who advises clients in a professional capacity may want to consider this coverage. When doctors purchase professional liability coverage, it is referred to as medical malpractice, and for attorneys, it is sometimes called legal malpractice.
What Does it cover?
Professional Liability insurance policies typically provide coverage for third-party claims of financial damage and economic loss due to your negligence, misrepresentation, inaccurate advice, or good faith errors you made.
Coverage for property damage and bodily injury are often excluded from the Professional Liability policy. Those exposures are usually insured under the Commercial General Liability or Businessowner’s Policy in place for your business.
Professional Liability policies typically include coverage for both indemnity and defense costs. Even if the claim against you is without merit, defending a lawsuit or claim is expensive, so having coverage in force to protect your business from this risk is important for your firm’s financial management.
Exclusions Frequently Found in Errors & Omissions Policies
There are some common exclusions to know about when shopping for an Errors & Omissions policy.
- Property damage
- Bodily injury
- Intentional acts
- Illegal or criminal actions
- Malicious or dishonest acts
- Cyber events and data breaches
Cyber risks have traditionally been excluded from Errors and Omissions policies, but some are now being written with optional cyber coverage included. Check with your agent to learn if your Errors & Omissions policy contains any coverage for cyber events and data breaches – you may need to purchase a separate Cyber and Privacy Insurance policy to fill gaps.
For some professions, Errors & Omissions policies provide some coverage for bodily injury, including doctors, architects, and engineers. Review your coverage and policies with your agent to discover and fill any gaps in your coverage.
Claims under Professional Liability Coverage
Claims made on an Errors and Omissions insurance policy are often on a claims-made trigger basis instead of an occurrence basis. An occurrence basis means the date the incident occurred is the trigger for making a claim. A policy that uses a claims-made trigger as the event for coverage is one where the date the claim is made is the coverage trigger.
How is Professional Liability Coverage Priced?
Commercial insurance policies are based on several factors, including your claims history, size of your business, location of your business, type of professional operations you have, and how much coverage you would like to purchase. The size and scope of your business are important factors since a smaller operation is likely to have less exposure to risk. Claims history is often a good determinant of future claims, so many insurers investigate prior losses when making underwriting decisions.
How Can I Purchase a Professional Liability Insurance Policy?
We can help you find the right insurance policy for your needs. Contact us today to start your free quote! Cusick Insurance Brokers works with all the top carriers, so we’re sure to have the right policy for your business.