Understanding Professional Liability Insurance

Professional Liability InsuranceIt is important for all businesses to understand that not all damages suffered by customers can be covered under a “property damage” claim. Nor can they always be covered under a “bodily injury” claim. Because of this, it is of the utmost importance to purchase a professional liability insurance policy.

Professional liability insurance is often referred to as errors and omissions coverage. Common entities that will majorly benefit from purchasing such insurance include:

  • Architects
  • Doctors
  • Lawyers
  • Accountants
  • Real Estate Agents

Understanding What is Covered

There are many things covered under a professional liability insurance policy. For example, a doctor would need such coverage in the event that he or she was to be sued for an issue related to medical malpractice. For an attorney, if he or she failed to properly do his or her job and it resulted in an offender being falsely prosecuted, a professional liability policy would ensure no liability could come back to haunt the lawyer. For an accountant, if a mistake was made that resulted in a business going bankrupt, the insurance policy would provide the lost funds back to the business without the accountant having to come up with money him or herself.

Who Benefits from Professional Liability Insurance?

In addition to the professional occupations listed above, there are many other people that will benefit from professional liability insurance. Any person working in an industry which upholds certain standards of care will benefit from an insurance policy.

Because different industries operate in different ways, there are many types of professional liability insurance policies available for purchase. A lawyer would of course need a different type of policy than that of a physician.

It should be noted that professional liability insurance is completely different than generally liability insurance. In addition, it’s different than homeowner’s insurance.

It should also be recognized that every policy will have its own exclusions. Before purchasing a coverage plan, it is extremely important to read carefully through the policy’s terms. A business should also identify its most dangerous threats, followed then by purchasing a policy that covers such risks.

For the most part, professional liability is required by those working in all health and construction industries. Additionally, anyone who is self employed will need to acquire a policy.

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