How to Understand Professional Liability Coverage

Professional Liability Insurance Covers Claims Made During the Time the Policy is in Force

Professional liability insurance, or insurance protection for professional neglect or errors and omissions, is generally set up so that claims filed during the policy period are paid. Therefore, claims that arise at a time before the insurance was in force might not be covered. However, some liability plans do provide for protection by including a retroactive date in the terms of the contract. In turn then, any claims made during the period the insurance is in effect but are associated with an incident that occurred before the date the policy was instituted and after the stated retroactive date are covered.

Errors and Omissions Insurance Coverage

In the case of errors and omissions insurance coverage, protection may only be limited to errors or mistakes, rather than negligence. This type of professional liability insurance is used most often by such professionals as:

–Real estate brokers

–Software specialists

Coverage for Civil Liability

You can also choose to purchase professional liability insurance to cover you for civil liability. Therefore, indemnity for specific civil liability claims can be included, if required, in a professional liability plan. For example, professional liability insurance usually does not cover such civil liability issues as libel or slander or breach of contract. However, these coverages can be added as riders to a professional liability policy, if needed.

Preventing Lawsuits

Professional liabililty insurance, also called professional indemnity insurance or PI insurance, is must-have coverage for most professionals as it will cover all the expenses related to any lawsuit that is made against you by a customer or any costs that you may accumulate when losing such a case. It can also prevent lawsuits as the insurance will pay for the settlement of any claims made by a consumer before the case is brought to trial.

You Need the Insurance even after you Leave a Covered Profession

Again, because professional liability insurance or PI insurance covers any claims as long as the insurance is in force, you need to make sure you maintain coverage even if you leave a company and are no longer employed in your occupation to protect yourself from any claims happening after you leave.

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