What Is Professional Liability Insurance?
Professional Liability Insurance protects professionals like web developers, lawyers, dentists against claims that initiated by their clients. Moreover, claims are made because of negligence and the bad service they experience. Additionally, this Insurance is a form of liability that protects professionals from claims, Like negligence, malpractice, copyright infringement and more.
How Professional Liability Insurance Works
Depending on the profession, professional liability insurance may have different names. Like medical malpractice insurance for the medical profession, and errors & omissions insurance for real estate agents. Moreover, professional liability insurance is a specialty coverage that doesn’t provide under homeowners’ endorsements, in-home business policies, or business-owners’ policies. Additionally, it only covers claims made during the policy period.
The difference in Professional and Malpractice Liability
Professional insurance protects business from claims like negligence, misrepresenting, wrong information provided. Like accountant who provides wrong balance sheet causing the client for financial loss. On the other hand, Malpractice is also a form of liability which protects doctors. Also, healthcare professionals against misconduct and negligence behavior.
The difference between Professional Liability Insurance and Errors and Omissions Insurance
Professional Liability Insurance is specifically for engineers and those of the architect fields. Errors & Omissions Insurance is specifically for those in the tech field, as well as real estate and accounting. Malpractice insurance is infamously known for those in the legal world and medical field. While they aren’t set in stone as hard rules when it comes to interchanging the terms, they are important to remember for your career field. You’ll always want to make sure you have one of these policies set and ready to go before you take on your first client. Without, you’ll be tag as vulnerable and possibly targeted.
What does and does not cover?
There are two types of professional liability policies: claims-made and occurrence. Most professional insurance policies are “claims-made,” meaning that the policy must be in effect both when the event took place and when a lawsuit 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 filed after the policy lapses.
This 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 part of inclusion.