Professional Liability Insurance: Who Needs it and Why
Reviewing the Protection
While some employers will supply professional liability insurance to their professional employees in case third-party claims are made against them for errors and omissions or negligence, the limits set for the coverage may not be adequate. In addition, you may not have sufficient coverage to provide you with reimbursement for lost wages, including any costs associated with your legal defense. Coverage should also provide protection for any claims made after an insured terminates his or her employment.
What Coverage should Include
An insurance plan for professional liability insurance then should pay all the legal costs that are related to investigating and defending a covered claim. Such a plan should also pay for settlement and court costs as well as the liability limits set by the policy. Reimbursement for lost wages should be included too.
Fields where Professional Liability or Errors and Omissions Insurance is Required
You need professional liability or errors and omissions coverage if you are in any of the following service-oriented or advice-giving occupations:
• Medical doctor
• Nurse
• Occupational therapist
• Physical therapist
• Respiratory therapist
• Dentist
• Dental Hygienist
• Pharmacist
• Optometrist
• Educator
• Attorney
• Engineer
• Business Owner
• Accountant
• Appraiser
Why Professional Liability Insurance is Necessary Coverage
The reasons business owners and professionals obtain professional liability or errors and omissions insurance is because general liability insurance only covers third-party claims with respect to bodily injury or property damage. Professional liability is meant to cover any litigation that arises from alleged misrepresentation, erroneous advice, or negligence by the insured.
Occurrence Policies and Claims-made Policies
You can either choose to opt for coverage under an occurrence policy or claims-made policy. While an occurrence policy covers you indefinitely for any suits that arise when the policy was in force, a claims-made policy only covers you for incidents that occur while you are paying for the plan. If you discontinue a claims-made policy, you can protect yourself from any incidents arising while you carried the protection by purchasing a tail endorsement which will allow you to report claims made against you after the termination of your claims-made plan.
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