If you're an individual who provides an important service professionally, you should strongly consider taking out a professional liability insurance policy.
This policy is often taken out by lawyers, doctors, accountants, and the like, as these professionals are prone to be sued for allegedly providing incorrect or ineffective consultation to their customers, patients, and clients.
Looking to learn a little more about professional liability insurance for individuals? Then read on. Here is your professional liability insurance guide.
First and foremost, what is professional liability insurance? This is a form of insurance that covers professionals financially in the event that they're sued for providing advice that negatively affects a client.
So, if a client were to file a claim of negligence against, say, a lawyer, that lawyer's professional liability insurance policy would help cover court costs, financial settlements, and legal representation.
This is an important insurance policy for individual professionals to possess, as it can prevent them from incurring thousands and maybe even millions of dollars worth of legal fees.
While it can work in a few different ways, the most common form of professional liability insurance works by setting a claims period and allowing the policyholder to make claims on events that occur within that period. There's also typically a 30- to 60-day extension period that enables you to make claims on events that occur after the initial claim period.
In cases such as these, claims must be made within the claims period. They can't be made after it has ended.
Note that there are also policies that enable you to make a claim after the policy has ended. Therefore, if an event occurs toward the end of your policy period, you can still claim it months down the line, even after your policy has come to an end.
For more information on the types of professional liability insurance available, give a call to an insurance agent. They'll help you pick a policy that suits your preferences and needs.
They'll also help you assess other types of insurance so as to ensure that your business is fully covered.
Now, you might be wondering: what types of professionals should have professional liability insurance? In essence, any professionals whose advice or services have the potential for a great negative impact on their customers.
Lawyers, doctors, and financial planners are some of the obvious ones. However, you might also need professional liability insurance if you're an IT consultant, personal trainer, mental health counselor, or beautician.
Other professionals who could eventually go on to benefit from personal liability insurance include photographers, property managers, and architects. If you have questions as to whether you would benefit from professional liability insurance, you should speak with an insurance agent.
We've noted that professional liability insurance covers you in the event that you're sued for negligence or malpractice. That's principally what it's used for. Overall, coverage includes the following:
Let's note this one more time. Professional liability insurance covers costs that you incur as a result of negligence or malpractice. So, if you were to, say, give bad financial advice to a client, this insurance would cover the cost that it takes to settle any disputes.
If you're being sued by a person or company for malpractice, negligence, or the like, your professional liability insurance policy will cover your defense costs. This is true regardless of whether you're proven liable or not liable.
Let's say you're a lawyer defending a client. Your client loses their case and blames you for representing them insufficiently. Professional liability insurance will cover any costs that you incur as a result of trying to right this wrong.
Whether you're a doctor, a financial planner, a lawyer, or some other individual in a position of authority on a subject, you have the potential to give bad advice to your clients.
Unfortunately, if this bad advice affects your client in a substantial way, they could very well sue you. Fortunately, your professional liability insurance will cover you monetarily in that event.
Maybe one of your employees incorrectly input data into a spreadsheet, resulting in a loss of money for a client. Perhaps one of your employees made a typo when entering a client's name, causing you to pass over an important document when working on that client's behalf.
In any case, if a clerical error results in your client suing you, your professional liability insurance policy will cover you monetarily.
We've discussed what is covered by professional liability insurance. Now, let's discuss what isn't covered.
Injuries aren't covered. If someone gets injured on your property, this policy won't cover the costs of the injury. A general liability insurance policy will, however.
It also won't cover injuries that occur to your employees while they're on the job. To cover these injuries, you'll need workers' compensation insurance.
Professional liability insurance doesn't cover property damage either. So, if you were to damage a part of someone's home while, say, installing an HVAC system, the damage wouldn't be covered. To cover this damage, you'd need a general liability insurance policy.
Then there's negligence as a result of data loss. For instance, if a client's financial information is lost because you didn't properly back up your database, the resulting legal costs will not be covered. You would need a cyber liability insurance policy in order to cover this.
As you can see, many individuals can benefit mightily from professional liability insurance. Are you interested in purchasing professional liability insurance for individuals? If so, Econosurance has you covered.
We offer a variety of professional liability insurance options. Regardless of your needs, we have an insurance policy that will accommodate you.
Contact us now to discuss your insurance needs!