Professional Liability Insurance

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Build a Safety Net With a Professional Liability Insurance Policy

A general liability insurance policy will only cover claims stemming from bodily injury, property damage, personal injury or an advertising injury. But what if a client sues for damages that result from you or your company’s negligence, misrepresentation, violations of good faith or error or failure to render an opinion or offer a service?

Professional liability insurance may be customized to meet your specific needs. For example, in a typical business day a pharmacist faces different risks than an architect might face. But both should have professional liability insurance – customized to their unique risks.

Professional liability insurance policies can cover judgments, attorney fees, court costs and settlements. Even if claims are found to be unwarranted, extended litigation can drain a company’s cash reserves or even cause bankruptcy.

Who needs a professional business liability insurance policy?

  • Health care professionals
  • Pharmacists
  • Veterinarians
  • Funeral directors
  • Church counselors 
  • Architects
  • Beauty Salons
  • Barber Shops

The basics

Professionals are expected to have a certain level of competence in their disciplines. It’s also expected that they will accurately perform their services, according to the common standards of conduct for their profession. If a professional makes a mistake on the job, they can be held responsible for any harm they cause to a person or business.

Professional liability insurance policies are generally issued on a claims-made basis, meaning that the coverage extends only to events that occurred during the period in which the coverage was active. It’s important to not let coverage lapse in order to ensure continuous protection against damaging events even if they occurred in the past.

Create a plan to avoid costly professional errors

If your profession makes you an expert in a certain area, like medicine, law or real estate, you could be exposed to one or more professional liability risks. No matter how careful you try to be, we’re all prone to make mistakes – in our personal lives and at work. Professional liability insurance might protect you against claims of negligence, malpractice or misrepresentation. Have a plan in place to reduce the possibility of making these mistakes on the job:

What type of professional business liability insurance should you buy?

Unfortunately there’s no “one size fits all” professional liability insurance policy and no standard wording. Policies must be carefully written to cover any risks and exposures particular to your type of business.

Some policies include defense expenses for fighting a lawsuit within the limits of liability while others might exclude any punitive damages awarded to the client. The wording of professional liability insurance policies varies from company to company, and each policy must be read carefully to make sure the coverage fits the exposure.

Premiums for professional liability insurance are based on a company’s revenues, type of professional service provided, number of employees providing the service and the company's loss history.

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