What is professional liability insurance?
Professional liability insurance helps to protect many white collar businesses and their employees from being held liable for "acts or omissions" and contractual liability. These businesses include legal, medical, accounting, engineering, and even social services. Most provide a service rather than manufacture or sell products. There are three basic forms of professional liability insurance: medical, other professional, and miscellaneous business.
Medical professional liability insurance covers healthcare providers for professional acts or omissions that result in bodily injury, mental anguish, humiliation, defamation, and invasion of privacy. Imagine a doctor prescribes a drug to treat a patient. However, a side effect of the drug hurts the patient. This doctor should have medical professional liability to help cover any lawsuit which came about because the doctor did something – an “act” – that resulted in injury even though the doctor did not intend for it to result in injury.
Other professional liability including attorneys, architects, engineers, accountants, and insurance agents and brokers all need some form of professional liability coverage. Errors and omissions coverage is an integral part of their professional liability insurance policies. For example, an architect leaves out a critical spec resulting in the need to make expensive and time-consuming construction modifications. Or an accountant transposes one number on an income tax calculation causing fines and late fees for the client. Some policies may also include protection against losses resulting from dishonesty, fraud, or misrepresenting employees.
Miscellaneous professional liability. Many other occupations need some type of professional liability protection. These include such diverse professions as real estate agent, hair-care professional, social worker, and even the clergy.
What kinds of coverages are found in professional liability insurance policies?
Each profession needs its own specific set of liability coverages. What works for the architect may not work for the accountant. Markel Specialty offers three general types of coverage. A professional liability policy may have a mix of these, depending on the profession.
- Professional liability helps protect the principals and the company if it is found that injury or property damage resulted from the business or while a principal was hired for service, such as acting as a personal trainer.
- Management liability provides coverage for both the company and its directors and officers for costs associated with defending actions brought against them by employees, shareholders, and other third parties.
- Miscellaneous errors and omissions protects against claims resulting from alleged negligent acts, errors, or omissions in connection with the professional services being rendered.
Please note that Markel Specialty may not provide professional liability coverages for all business types and coverage is subject to policy limitations and exclusions. Talk to a Markel Specialty agent to discuss what coverages would work best for you and your business.