What is professional liability insurance?
Professional liability insurance is a product designed to protect professionals from claims of negligence as they perform their duties. Professionals with expertise in areas that require a high standard of conduct could benefit from this insurance. Lawyers, physicians, real estate agents, accountants, and others that are subject to claims of malpractice or misrepresentation often obtain professional liability insurance.
Depending upon the profession, this type of insurance also is called errors and omissions coverage or medical malpractice insurance. A policyholder is only insured during a defined time period and claims against the professional will only be honored during this time. The purpose of the insurance is to indemnify the insured against financial losses of professional misconduct or error in the course of his or her duties.
Synonyms for professional liability insurance
Professional indemnity insurance is another term insurance professionals use when talking about professional liability insurance. The terms are essentially interchangeable.
- Professional indemnity insurance: This term is used as an alternative to professional liability insurance.
- Errors & omissions insurance: This term is used as an alternative to professional liability insurance.
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When do I need to be aware of professional liability insurance?
Professionals who work in certain fields should be aware that their office could be at risk due to adverse judgements. A malpractice or errors and omissions claim could result in a large monetary loss. Without professional liability insurance, a doctor or lawyer could be forced out of business as the result of a malpractice or negligence claim. A person with this insurance should know that in the event of a claim against the insured, the policy is in place to pay some or all of the claim costs.
What is important to know about professional liability insurance?
This type of insurance is a necessity for many professions. It offers peace of mind for professionals, and also protects against large financial losses. There are some other important items you should know about professional liability insurance:
- Professional liability insurance does not cover criminal prosecution or legal liability under civil law.
- Policyholders should read and understand the specifics of their coverage to ensure adequate protection.
- Medical professionals can become targets of lawsuits alleging medical malpractice and often require this type of insurance.