Professional liability insurance protects professionals against claims made by their clients. For example, for a medical professional, professional liability insurance is medical malpractice. Professional liability insurance is also called as Errors and Omissions insurance that protects against the legal action arising due to failure to perform professional duties or professional negligence.
Professional liability may also arise due to loss of client data, system failure and negligence. E&O policy holders include software developers, real estate brokers, management consultants and technology consultants.
Many people think that general liability insurance covers all claims but that is not the case. It covers only bodily injuries and property damage. It does not cover claims related to professional services. Liability arising due to professional errors and negligence is far greater than risks covered by general liability insurance. Without professional liability insurance; the legal claims can lead to bankruptcy of your company especially, for small businesses. The insurance cover makes sure that the business operations do not suffer.
Professional liability insurance is a form of protection for both professionals as well as clients. For professionals, insurance coverage will shield the personal assets of business. For the client who has suffered damages because of the actions of a business professional, liability insurance will make sure that there are sufficient funds obtainable to compensate for the wrong that has been done.
Before you purchase professional liability insurance, make sure the policy includes following features-
- The policy should pay for legal claims which must also include court costs (defense costs).
- Have personal injury coverage to protect you against claims of slander and privacy invasion.
- Intellectual property infringement coverage to protect against claims from copyright infringement.
Professional Liability insurance protects you against the unforeseeable and is very important for the long-term survival of your company. It protects against professional liability risks, pays for legal defense and saves business from bankruptcy.
