Professional Liability Insurance

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Build a Safety Net With a Commercial 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 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 in a heartbeat or even cause bankruptcy. 

Who needs a professional business liability insurance policy? 

  • Health care professionals
  • Pharmacists
  • Veterinarians
  • Funeral directors
  • Church counselors 
  • Architects

The basics 

Professional people are expected to have a certain level of competence in their particular discipline. It’s also expected that they will professionally and accurately perform their services, according to the common standards of conduct of their profession. Intended or unintended, if a professional person fails on the job, they can be held responsible for any harm they cause to another 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. 

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 the 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 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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