If you’re a professional who offers advice, services, or consulting services, you may be required to carry professional liability insurance. In this blog post, we’ll give you a better understanding of what professional liability insurance is and who may need it. Keep reading to learn more!
What Is Professional Liability Insurance?
Professional liability insurance is a type of insurance designed to protect people and businesses against lawsuits related to their profession and any alleged errors or omissions.
It is important to note that professional liability insurance is not the same as general liability insurance which is focused on covering individuals and businesses against bodily injury and property damage.
Professional liability insurance covers legal fees, settlements and damages in the event that a client claims that an error or omission has resulted in financial loss, property damage, or reputational damage.
What Does Professional Liability Insurance Cover?
Professional liability insurance coverage can vary depending on the policy, but it typically covers the following (up to the limits stated in your policy):
- Claims related to errors and omissions in the services provided
- Claims related to the failure to deliver services
- Legal fees and defense costs associated with claims
- Settlements and damages awarded in litigation
Who Needs Professional Liability Insurance?
Professional liability insurance is necessary for most professionals who offer services in areas such as law, medicine, engineering, accountancy, and real estate.
However, Professional Liability Insurance is not limited to these professions and can be relevant to any business or individual that provides a service or advice that could result in a financial loss to their clients.
If you offer any kind of professional service, it is important to consider obtaining professional liability insurance. Some professions likely to require professional liability insurance include:
- Accountants and financial advisors
- Lawyers
- Consultants
- Real estate brokers
- Architects and engineers
- Healthcare providers
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