Do you or your business provide professional services or advice to other businesses or individuals? Could your counsel or service lead to losses by your client for which you could be held responsible? If so, you’ll likely want to purchase professional liability insurance, also known as errors and omissions insurance (E&O).
Claims not covered by general liability insurance that are covered by professional liability insurance include negligence, misrepresentation, violation of good faith and fair dealing, and inaccurate advice.
What types of businesses need professional liability insurance?
In some states, professional liability insurance is required, especially for attorneys and doctors. Legal and medical malpractice insurance policies are special types of professional liability insurance. Other professionals that should consider professional liability insurance include:
Accountants
Architects
Engineers
Graphic designers
Information technology (IT) consultants
Insurance professionals
Investment advisors
Management consultants
Real estate agents and brokers
Software developers
This list is not exhaustive. Consult with your insurance professional or inquire with your profession’s trade association to determine if you might need professional liability coverage.
What’s covered… and what’s not
There are two types of professional liability polices: claims-made and occurrence. Most professional liability insurance policies are “claims-made,” meaning that the policy must be in effect both when the event took place and when a lawsuit is filed for a claim to be paid. If, however, you change careers or retire, you may want to purchase an “occurrence” policy that will cover any claim for an event that took place during the period of coverage—even if the suit is filed after the policy lapses.
Professional liability insurance will pay the cost of legal defense against claims and payment of judgments against you, up to the limit of the policy. In general, coverage does not extend to non-financial losses or losses caused by intentional or dishonest acts. Other fees, such as licensing board penalties, may also be included. Policies will generally have a deductible ranging from $1,000 to $25,000. The amount of professional liability insurance you will need and how much it will cost depends upon the size of your business and the level of risk it poses.
You may be able to include professional liability coverage in a Commercial Package Policy (CPP) as an endorsem*nt. Note, however, the professional liability coverage is not included in an in-home business policy or Business Owners Policy (BOP).
Third-party liability insurance is a type of coverage that financially protects you if you're considered responsible for damages or injury to another person or their property. This type of coverage is available for both home and car insurance.
Find a reputable insurance company — one that is fully licensed in all jurisdictions, is financially stable (check the A.M. Best rating), provides support with claims, provides confidential ethics and risk management consultation (such as The Trust's Advocate 800 Program), and has competent and convenient customer ...
Only general liability insurance can spare your business from lawsuits over a visitor slipping and falling on your commercial property. And only professional liability insurance can shield you from the high cost of alleged professional mistakes that cause a third party financial losses.
Personal liability insurance can help you financially in case you are sued by a patient or their family. Nurses can get sued because of negligence that caused harm to a patient or death. To pick the right coverage, do your research. Ask other nurses which policies they hold and how happy they are with it.
Casualty insurance is a type of insurance that provides coverage for losses and liabilities resulting from accidents, injuries, and unexpected events. Casualty insurance includes various types of coverage, such as general liability, auto insurance, workers' compensation, and professional liability.
Third Party Liability (TPL) refers to the legal obligation of third parties (for example, certain individuals, entities, insurers, or programs) to pay part or all of the expenditures for medical assistance furnished under a Medicaid state plan.
Third party liability is insurance against money which an insured may have to pay to third parties if they accidentally cause them injury, loss, or damage. Travel agencies must carry third party liability coverage against damage caused to their customers and service providers.
Public liability insurance covers bodily injury and property damage to third parties, while general liability insurance covers a wider range of incidents, including bodily injury, property damage, and personal injury caused by business operations.
The main difference between comprehensive and third-party insurance is the coverage offered. A third-party insurance covers only the damages caused to the third party and their property or vehicle. Whereas comprehensive car insurance covers both own damage and third-party liabilities.
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