Insurance is confusing, as we’ve mentioned before and will say again. What is liability? What distinguishes commercial general liability from professional liability?
We can explain that to you! We’ll assist you in comprehending what distinguishes it, whether you actually require it, and why.
Professional liability insurance shields you (or your company) from claims of mistakes, negligence, or carelessness made while practising your profession. Even if the accusations filed against you are unfounded, it will pay for your damages, including court settlements, administrative charges, and attorneys’ fees. Errors and omissions insurance, or E&O insurance, is a term used to refer to professional liability insurance.
The 2 Most Common Professional Liability Insurance Questions And Answers
1. What Is Covered Under Professional Liability Insurance?
Failure to Render Services: The provision of services that either fall short of the professional standard of care or that fall short of the expectations of your client. Who commit crimes most frequently? Missing or frequently changing due dates, failing to pay attention to minute details, and working with inferior materials. For medical professionals, this also applies to misdiagnosis.
Any alleged contract violation(s) or disregards for relevant legal requirements constitute a breach of contract. That covers a variety of things, such as failing to finish a project on time, meet project deliverables, offer specific support services, violate confidentiality, lose data, and more.
Poor Advise: Any advice that could have resulted in a client suffering serious injury or suffering financial loss. If you provide clients advise, you’re especially vulnerable here (financial planners, real estate brokers, advertising professionals, and the like).
Misrepresentation: Lack of or poor communication with customers who are unfamiliar with technical phrases and industry jargon might result in unintentional misrepresentation of the good or service you’re providing. Here, common offenders include those in accounting, IT, law, or even insurance.
2. What Will Not Normally Be Covered In A Professional Liability Insurance?
Intentionally Wrongful, Fraudulent, or Illegal Acts: Insurance will not cover intentional dishonesty or criminal behaviour, such as purposefully turning in subpar or incomplete work, stealing from a client, or breaching the law.
Claims of Physical Injury or Property Damage: Commercial General Liability Insurance provides protection for customers and third-party suppliers who sustain injuries as a result of goods, services, and/or property.
Employment Matters: Employment Practices Liability Insurance covers workplace problems such employee discrimination, harassment, injury, and wrongful termination.
BUT in light of your risks, you might additionally take into account:
obtaining additional coverage for all of your company’s requirements in addition to your professional liability insurance to ensure full coverage (read more about business crime insurance); OR
Obtaining additional coverage for certain risks (such as an additional $1 million for a data breach or property damage) by consulting with your broker.
The final word! Everyone makes mistakes, regardless of how skilled they are at what they do. And even if you don’t, customers can change their minds. Sometimes all it takes to start a claim is a single documentation mistake, a fact that was misstated, or a disagreement with an irate client. Any company that charges consumers for advice or services runs the danger of being sued and has to at the very least think about purchasing professional liability insurance.