Choosing Professional Liability Insurance? Tips & Tricks

Professional liability insurance can protect you against potential claims made by your patients/clients.

Who Should Have It?

Professionals such as home inspectors, attorneys, physicians, nurses, accountants, and architects can obtain professional liability insurance, also known as professional indemnity insurance or medical malpractice for those in the medical profession, for protection over claims made against them or their practice. There is also coverage for notaries public, real estate brokers, appraisers, as well as website developers and other technology creators, in what is called errors and omissions insurance (E&O). This coverage centers around financial loss, failure to perform, and the error or omission of services or product sold to a client.

Additional coverage can also be added for:

  • Intellectual property
  • Personal injury
  • Breach of warranty
  • Security
  • Cost of contract
Why Get Coverage?

The reason professional liability insurance is important is because your usual liability insurance will only cover property damage, personal injury, bodily injury or advertising injury claims. Commonly, causes for claims on a general liability policy do not reflect the aforementioned claims and generally occur more along the lines of allegations of negligence, violation of fair dealing and good faith, inaccurate advice, and misrepresentation.

These types of policies are set up on a claims-made basis (claims-made coverage). What that means is that the policy will only cover incidents that occur during the active policy timeframe. Be sure to keep your coverage on a continuous basis because if you cancel the policy, it can make it seem as though coverage never existed. Occurrence coverage can provide a broader coverage area and can cover negligent acts committed during the insurance policy period. Discuss with your agent which coverage is ideal for you.

Tips & Tricks
  • Evaluate your current coverage.
  • Work with an agent who has knowledge of the type of policy you need, whether it is for medical, technological, or other professional practices.
  • Compare policies and their coverage for what you need.
  • Compare premiums along with the coverage areas.
  • Know your limits of coverage.
  • Review the definition of terms. Restrictive definitions can leave you vulnerable to anything outside of what the terms state, so be sure to know if any restrictions exist in your policy and discuss them with your agent.
  • Review any cancellation guidelines within your insurance policy.
  • Review any exclusions with your agent, which can vary, depending on your profession.
  • Know that your coverage with professional liability insurance is limited to practice settings and acts specified in your policy.
Make a Wise Choice

Understanding that your insurance policy is a legal document and that falsifying information on it can void the policy is very important.

You must maintain all obligations specified in your policy or it could void your insurance policy and may be grounds to assess individual accountability for damages. Willful wrongdoing can render your policy null and void and could end in a lawsuit for breach of contract.

In order to make the best choice for you, discuss your options with an experienced agent.

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