Professional Liability

Professional Liability

PROFESSIONAL LIABILITY

Professional Liability insurance covers any errors or mistakes made by you or people who work for your business, while trying to provide a service. Such branches of coverage under this insurance policy would include legal defense costs, judgments, and settlements (or company losses).

Professional liability insurance, more commonly known as errors and omissions (E&O insurance), is a special type of coverage that protects your company against claims that a professional service you provided caused your client to suffer financial harm due to mistakes on your part (errors) or because you failed to perform some service (omissions).

E&O insurance can cover the cost of defending your company in a civil lawsuit and certain damages awarded, even if the legal action turns out to be groundless. Professional liability insurance is required by law in some areas for certain kinds of professional practices, especially medical and legal, where it is more commonly called malpractice insurance. This type of protection is not part of your general liability insurance or homeowners insurance.

Coverage does not include criminal prosecution, and there is a wide range of potential liabilities under civil laws that may not be covered unless written explicitly into the professional liability insurance policy. Common claims that professional liability insurance covers are negligence, misrepresentation, violation of good faith and fair dealing, and inaccurate advice. Some policies could also cover privacy violations.

Many types of businesses need professional liability insurance. If your company business works directly with customers while providing services, you should consider professional liability insurance.

What is covered?

  • Alleged or actual negligence
  • Defense costs
  • Personal injury (e.g., libel or slander)
  • Worldwide coverage
  • Temporary staff and independent contractors
  • Claims arising from services provided in the past
  • Claims and damages

What is NOT covered?

  • Bodily injury or property damage
  • Fraudulent acts
  • Employment matters
  • False advertising
  • Patents and trade secrets
  • Personally identifiable information
  • Other services
https://www.thehartford.com/business-playbook/in-depth/professional-liability-errors-omissions-insurance