What is professional liability insurance? Almost everyone has heard of medical malpractice insurance, but professional liability insurance is not as well-known. The exact definition of professional liability insurance varies depending on the professional being insured, but in general, it protects you against “errors and omissions” that occur when rendering professional services. It safeguards you against mistakes or negligence that result in a financial loss for your client. It differs from a general liability policy, which is designed to cover bodily injury and property damage claims.
Unfortunately, people are quick to sue and it should be clear by now that carrying a professional liability policy is essential to protecting your business and personal assets. When shopping for a professional liability policy, one of the first things to consider is the claim limit. The amount of coverage needed can vary and can also have required limits.
Another factor to consider is defense costs. Some policies subtract the cost of your defense from the claim limit, which leaves less money available to pay judgments. Other policies pay for defense costs on top of your claim limit. Finally, check for a loss of earnings clause. Policies that offer this benefit pay for the time that you spend in court, while policies without it will not cover those costs.
