Professional Liability Insurance | Zensurance (2024)

FAQs

What is professional liability insurance for dummies? ›

Professional liability insurance is the same as errors and omissions insurance. It's a form of small business insurance that covers your business against claims of mistakes in professional services, such as services that are inaccurate, late or never delivered. It covers your legal costs, judgments and settlements.

While not required in every state for every profession, if you provide health-related professional services, maintaining malpractice coverage can reduce your financial risk. Doctors and nurses are often serving on the frontline of healthcare and must make critical decisions, which can leave them open to lawsuits.

Any business that sells its expertise should consider professional liability insurance. Also known as errors and omissions (E&O) insurance, this coverage protects your company and your bottom line from customer claims of late, incomplete, or unsatisfactory work. Accusations like these can lead to costly lawsuits.

Professional Liability Claims: Trigger of Coverage

In order to trigger coverage under a professional liability policy, there must be an allegation that you or your business made an error or omission in the course of rendering professional services that resulted in harm to a third party.

What Are the Basic Types of Professional Liablity Policies? The two types of professional liability insurance are claims-made and occurrence.

Professional liability insurance can help cover damages resulting from professional accounting services that may include tax preparation and planning, accounting services, business counseling, audit, and more. Having insurance in place can help firms manage their bottom line and protect their business.

Some nurses believe that despite facilities having coverage for you, they might protect themselves first, referring to it as “throwing you under the bus.” It is advantageous to have personal liability insurance. If you get sued, facilities might limit coverage, and you could be responsible for the rest of the claim.

Professional liability insurance is a type of business insurance that provides coverage for professionals and businesses to protect against claims of negligence from clients or customers. Professional liability insurance typically covers negligence, copyright infringement, personal injury, and more.

What this means is that if you don't have professional indemnity insurance, the number of projects that you're able to work on is a lot more limited. If you're required to have professional indemnity insurance due to a contractual requirement, the contract will usually specify the minimum indemnity limit.

Professional indemnity insurance protects you against claims for loss or damage made by clients or third parties as a result of the impact of negligent services you provided or negligent advice you offered. Compensation claims can be brought against you even if you provided a service or offered advice for free.

Are professional liability and professional indemnity the same? ›

The short answer could be designed as follows: professional indemnity insurance cover claims made by clients for professional negligence or mistakes, whereas public liability insurance covers claims made by members of the public for injury or damage.

Under a claims- made policy, the event that triggers the insurer's duty is the reporting of a claim within the policy period arising from an occurrence within the same policy period. Since the insurer's liability is not open-ended, costs can be predicted more accurately and high charges for uncertainty can be reduced.

Professional liability insurance, also known as Errors & Omissions (E&O) coverage, protects businesses against losses resulting from negligence, errors and omissions in the performance of a professional service.

The elements of a cause of action in tort for professional negligence are “(1) the duty of the professional to use such skill, prudence, and diligence as other members of his profession commonly possess and exercise; (2) a breach of that duty; (3) a proximate causal connection between the negligent conduct and the ...

Type of Services

An insurer determines a professional liability insurance premium based on their estimation for the number, or probability, or risks.

Professional liability insurance is commonly known as errors and omissions (E&O), professional indemnity, or malpractice insurance.

EPLI typically covers legal costs related to alleged wrongful acts by the employer or its employees, while professional liability insurance covers legal costs related to an employee's failure to provide professional services competently.

Casualty insurance is a type of insurance that provides coverage for losses and liabilities resulting from accidents, injuries, and unexpected events. Casualty insurance includes various types of coverage, such as general liability, auto insurance, workers' compensation, and professional liability.