What Is Professional Liability?

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Businesses and professionals across the country face lawsuits every day.  In some professions, the numbers are staggering.  99% of physicians will have at least one lawsuit against them by age 65 (New England Journal of Medicine).  Even in industries where the settlement itself isn’t a lot of money, the legal fees can be quite a burden.  Typical lawyer fees may exceed $150 per hour—a necessary expense even for those not at fault!  Professional liability insurance was created to shield businesses and professionals from this heavy burden. 

What Does Professional Liability Insurance Cover?

Professional liability insurance provides protection from particular lawsuits.  It covers legal and settlement costs.  You may also hear it called “Errors and Omissions (E&O)” and “Malpractice” (for physicians and lawyers).  This is not to be confused with general liability insurance.  General liability protects your business from bodily injury or property damage.  Professional liability provides coverage for claims resulting from:

  • Negligence

  • Misrepresentation

  • Breach of Contract

  • Inaccurate Advice 

Who Should Have Professional Liability Insurance?

Anyone who provides professional services or offers advice should seriously consider professional liability insurance.  In some states, it may even be required by law for your profession.  Common professions we work with include:

  • Accountant

  • Chiropractor

  • Doctor

  • Dentist

  • Engineer

  • Financial Planner

  • Graphic Designer

  • Lawyer

  • Realtor 

It’s important to note that anyone can sue you.  A lawsuit will cost money, even if you aren’t at fault and will easily win the case.  Professional liability offers you the coverage you need.

What Are Some Real-Life Examples?

It can be easier to understand the importance of professional liability by reading the stories of people who have faced lawsuits of their own.  These examples can serve as warnings to other professionals in their respective fields:   

  • A client blamed a chiropractor for making their back pain more unbearable.

  • A patient sued a doctor for not catching a cancer diagnosis earlier.

  • A financial planner recommended investing in Cryptocurrency.  After a client lost a considerable amount of money, they sued for the bad advice.

  • A client took a graphic designer to court because they felt the completed project didn’t fulfill the contract specifications.

  • A homeowner sued their realtor for failing to disclose their home couldn’t be used for a home daycare business.

What Isn’t Covered by Professional Liability?

Professional liability insurance doesn’t cover every lawsuit.  While it does cover negligence, misrepresentation, breach of contract, and inaccurate advice, there are other claims it simply won’t protect you from.  Some major uncovered claims include:

  • Bodily Injury

  • Employment Discrimination

  • Illegal Actions

  • Intentional Wrongdoing

  • False Advertising

  • Property Damage

  • Workplace Harassment

 How Can I Learn More?

As your local insurance agency, we are here to help you understand everything you need to know about professional liability.  We can answer all your questions, and we can gather as many quotes as you need.  Call us today for a no-cost consultation.