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Professional Liability Insurance

Many of you may have heard about insurance malpractices that go on in the medical field. However, the term professional liability insurance is not common among patients. Let's look at its definition: It helps in protecting against all omissions and errors while the professionals provide equivalent services to the users. The definition mentioned isn't the only meaning of professional liability insurance. This definition aspect varies based on the insured professional. It typically helps you safeguard against negligence and mistakes that can even cause you financial loss. It helps you in covering the legal defense cost, helping you in overcoming appropriate damages. The aspects that it covers depend on the professional liability insurance itself. It has three types that are commonly used against usual errors in the professional world. Directors and officers liability insurance, Errors and omissions liability insurance, Malpractice insurance. Now let's look at these three types independently so that you can understand before you can step into this world of insurance and lawsuits.

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Fast facts about Professional Liability Insurance

Which businesses need professional liability insurance?

Businesses that offer a professional service or give advice to clients need professional liability insurance (also known as errors and omissions insurance). It’s the only business insurance that protects against dissatisfied clients who file a lawsuit over a mistake, missed deadline, or another complaint related to the quality of your work.

The circumstances that lead to potential professional liability claims are common in some industries:

If a client has unmet expectations based on a miscommunication or an error in a contract, email, or order form, they may sue.

If you give erroneous instructions or advice that causes financial losses a client may blame you and sue for damages.

If your work is late, incomplete, or fails to meet industry standards, your business could face a lawsuit.

Does professional liability insurance cover frivolous lawsuits?

Yes. Even if your business wasn't at fault, a client who believes you caused their financial loss might sue you. Professional liability insurance covers your legal expenses even if the lawsuit never makes it to court

How much will professional liability insurance cost my small business?

It depends. Your professional liability insurance policy will cover liabilities specific to your business. Your provider will consider your industry, your claims history, and your services to determine an insurance premium. The options you choose – such as deductibles, policy limits, and types of coverage – will also affect your rates.

How do I make a professional liability claim?

To make a professional liability claim, simply call your insurance provider. Your agent will ask you to provide a description of the incident and basic information such as your name, the business name, and your policy number. Your insurance agent can guide you through the process and provide answers to any additional questions.