With claims increasing the need for professional liability insurance coverage is even greater.
What is professional liability insurance?
Professional liability insurance, also referred to as professional indemnity insurance, protects professional personnel against negligence claims made by their patients or clients. Because claims become more frequent in a struggling economy, it’s important to protect yourself with professional liability insurance.
Why do you need it?
Professionals who commonly turn to this type of liability insurance for coverage include architects, home inspectors, lawyers, physicians, real estate brokers and accountants – among others.
Specific professional liability insurance carries different names depending on the profession. For example, professional liability insurance in the medical profession may be called medical malpractice insurance, while real estate brokers fall under errors and omissions insurance coverage.
What is covered with professional liability insurance?
Negligence
Professionals commit negligence when a mistake they make while providing their professional service leads to a financial loss to someone else.
Misrepresentation
Misrepresentation happens when a professional makes a false statement of truth that affects another party’s decision related to a contract. As a result, the contract may be declared void and the other party may choose to seek damages.
Violation of good faith and fair dealing
Violation of good faith and fair dealing
Good faith and fair dealing is violated when a party enters into a contract dishonestly and without the resources, capabilities, or intention to fulfill their commitment. The offending party can be held liable for any damages their violation causes.
Inaccurate advice
Professionals can be held liable when they give inaccurate advice that causes their client to suffer a negative outcome or loss.
Other coverage options may also be included and are not limited to what has been indicated.
Frequently Asked Questions
How is professional liability different than general liability?
Many factors contribute, including the scope of all current and future work of the policy holder. Your Butler Byers Risk Consultant will guide you in assessing your organization’s tasks and ensure adequate coverage.
What does my business need for professional liability insurance?
Many factors contribute, including the scope of all current and future work of the policy holder. A Butler Byers risk consultant will guide you in assessing your organization’s tasks and ensure it’s adequately covered.
Do I need both general liability and professional liability coverage?
Generally, we recommend that professionals have both types of coverage for the most complete protection, as professional liability insurance covers situations that general liability does not. Your Butler Byers Risk Consultant will make sure you have all the professional coverage you need.
Am I legally required to purchase professional liability coverage?
In some cases, in order to retain certain designations, professional liability coverage is required. In other cases, while it may not be a legal requirement, getting this type of coverage can provide financial assistance should a legal situation arise.