Professional liability insurance, also known as errors and omissions insurance (E&O) or malpractice insurance, protects professionals from financial losses resulting from claims of negligence, errors, or omissions in the performance of their professional services. It is specifically designed for individuals or businesses that provide professional advice, services, or expertise.
Professional liability insurance covers legal defense costs, settlements, and judgments that may arise from claims made by clients or third parties alleging financial loss or harm due to the professional's actions or failure to act. This insurance is typically tailored to the specific profession and the risks associated with it.
Professionals who may require professional liability insurance include doctors, lawyers, architects, engineers, consultants, accountants, real estate agents, and technology professionals, among others. The coverage is important as it helps protect professionals from the potentially devastating financial consequences of a lawsuit or claim.
The policy typically covers a wide range of risks, including errors in professional advice, negligence, breach of duty, misrepresentation, and failure to deliver promised services. It may also cover defense costs for disciplinary proceedings or regulatory investigations related to the professional's practice.
The coverage limits and premiums for professional liability insurance vary depending on factors such as the nature of the profession, the level of risk involved, the claims history of the professional, and the desired coverage limits. It is important for professionals to carefully assess their liability risks and work with an insurance provider to determine the appropriate coverage and policy terms to adequately protect their practice.
Professional liability insurance is often a requirement for professionals in certain industries or for those who are members of professional associations. It provides peace of mind and financial protection in the event of a claim or lawsuit, allowing professionals to focus on their work without the fear of potential legal and financial consequences.