As a professional in your field, you are expected to take on quite a lot of responsibility. However, more responsibility also comes with a higher likelihood of making mistakes that can lead to lawsuits. If that happens and you do not have any insurance, your professional credentials and livelihood could be ruined.
To avoid that, you can purchase professional liability insurance, which covers you in most eventualities. This article explains the key features of professional liability insurance and how to save money on it. Keep reading if you would like to learn more.
In short, professional liability insurance aka errors and omissions (E&O) insurance covers you when clients file a lawsuit against you. This might happen when they feel that your advice or service was misleading or caused them losses.
Claims are typically made for the following: negligence, malpractice, and misrepresentation. General liability insurance, a common insurance for businesses to have, does not cover these complaints.
There are typically two types of professional liability insurance available: claims-made policy and occurrence policy.
The claims-made policy covers you for any lawsuits against you, irrespective of when the event happened. The policy can specify how far back its coverage can extend. Once the policy expires, you will be without any insurance and cannot file any more claims.
The occurrence policy provides coverage for a specific period. That means that all claims within that period will be covered by your insurance, regardless of when you file the claim. You can file a claim even after the policy expires if the event occurred within the covered period.
Malpractice insurance is a subset of professional liability insurance, usually purchased by healthcare professionals and lawyers. It specializes in protecting healthcare providers and attorneys when a lawsuit is filed against them. In the case of medical malpractice, it also covers death payouts.
Malpractice insurance is not available to other professionals who can just purchase regular professional liability insurance.
Some professionals, like doctors and attorneys, are required to carry insurance by state law. However, other professionals who can need professional liability insurance include:
This list is not exhaustive and many other professions can purchase professional liability insurance. If you are unsure whether you need professional liability insurance, contact a local insurance agent or broker.
Professional liability insurance usually covers the following:
Irrespective of whether you are guilty and the accusation truthful, you can still be taken to court. Going to court always involves heavy legal fees. You may be later reimbursed for your defense costs if the lawsuit is deemed frivolous, but that takes time and there are no guarantees.
You will not be covered for the following:
When you are faced with a major lawsuit from a disgruntled client, you will be grateful for professional liability insurance — it will save you a lot. However, there are many things you can do to also save some money on the policy itself. Here are a few suggestions to consider:
Professionals need professional insurance. If you want to purchase it now or discuss the available options with our experts, you can quickly send us an email, give us a call, or fill out the free quote form on the website.
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