WEDNESDAY, OCTOBER 28, 2020
Professional liability insurance is a policy designed to protect certain businesses and individuals who may offer a specialized or professional service. This insurance is not the same as general liability, nor can it be used as a substitute. Instead, most businesses choose to carry both professional liability and general liability to completely cover their assets.
Essentially any business or individual providing a professional service should consider professional liability insurance. This includes:
-
Medical professionals
-
Fitness instructors
-
Contractors
-
Beauty technicians
-
Architects
If you are at a high risk for a lawsuit directly regarding your work, you should carry professional liability insurance. This insurance may have a different name depending on your industry. It is primarily known as E & O insurance, or Errors and Omissions Insurance. In the medical world, it is known as medical malpractice insurance.
What Does Professional Liability Insurance Cover?
Professional liability insurance covers businesses and individuals in case of a lawsuit regarding professional negligence. For example, say you are an accountant working for a client. You make one mistake while working late at night, but that technical error causes your client to lose money. The client can then sue you for their loss.
Professional liability insurance can help compensate the client and help you with legal expenses in case of a lawsuit, such as defense fees and settlement costs.
Another example would be if you were a contractor working on a client’s home. You finish a project in their basement, but one of the pipes is loose. The moment they turn their water on, the pipes burst and cause thousands of dollars in damage to their basement. Professional liability insurance can help compensate for the damages and protect you from an expensive lawsuit.
Who Pays for Professional Liability Insurance?
If you work for an employer, such as if you are a nurse at a hospital, you may be covered under your employer’s professional liability insurance policy. However, many professionals choose to carry their own professional liability insurance policy to guarantee that they have coverage. While an employer’s policy may offer some compensation, that compensation could be limited.
Professionals in particularly high-risk professions, such as surgeons, tend to carry their own policy. This ensures they are covered, especially if they decide to switch employers. Some policies will only cover you as long as you work for the employer, so having your own policy can help cover the gaps.
No Comments
Post a Comment |
|
Required
|
|
Required (Not Displayed)
|
|
Required
|
All comments are moderated and stripped of HTML.
|
|
|
|
|
|
NOTICE: This blog and website are made available by the publisher for educational and informational purposes only.
It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional
in your state. By using this blog site you understand that there is no broker client relationship between
you and the blog and website publisher.
|