Professional Liability / Errors and Omissions Insurance

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In short, professional liability insurance covers a business or professional individual against claims for loss due to wrong advice or failure to do what was asked of them. This is sometimes known as errors and omissions insurance. People often seek advice from professionals, because by definition these professionals are supposed to have a special set of skills and knowledge about their specific field. For example, you may pay to get legal advice from a loyal advisor, trusting that their advice may help get you out of that pile of parking tickets in your office. Well, if you are paying this professional, then you are expecting them to deliver a high standard of expertise and if they fail to meet these expectations, you may get angry and decide to take legal action against them for their “bad” advice.

This is where professional insurance is vital. Your job depends on people paying for this professional advice, and you know full well that this advice is not always going to work out for the customer. To protect yourself from these kinds of lawsuits, you can purchase a professional liability insurance policy.

Professional liability insurance provides coverage for the defense and for errors and omissions in the rendering of professional services. Standard liability contracts do not provide this kind of coverage.

Most professional firms have professional service in place. Any business that provides a consulting service, fee for service or any form of professional opinion should have professional insurance to cover their backs. Professional insurance has grown and there are now professional insurance programs for lawyers, accountants, appraisers, architects, broadcasters, engineers, doctors, hospitals, real estate agents, insurance agents, directors and officers, dentists, geologists, personal trainers and psychologists. Really anyone in a profession that is subject to professional exposures is a good candidate for liability insurance.

With a professional insurance policy you are provided coverage for legal defense cost, for professional services incorrectly dome or not done.

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The sad reality is that today’s world is very lawsuit happy. If you are a business owner you may benefit greatly from a professional insurance policy. Typical liability coverage does not often respond to suits involving professional services, nor do they cover any legal disputes involving financial losses. Professional liability insurance compliments general liability coverage and pays for these types of things.

If you are a business professional of any kind, you should ask your local independent insurance agent about a professional insurance policy to see if you could benefit from the coverage. All it takes is one lawsuit and the high fees that may come with it for you to realize you could have protected yourself wit professional insurance coverage.

Professional Liability Insurance

Doctors, contractors, and lawyers are frequently sued by their patients and clients.  They can be subject to a lawsuit if they fail to do something that they reasonably should have done, or if they do something that they shouldn’t have done under the circumstances.  Although these are the most prominent cases of professional malpractice, architects, college staff, opticians, and funeral directors can also be accused of a professional error or omission, along with barbers, advertising agencies, and veterinarians.  In this day and age, even electronic data processors may be subject to a claim.  To make sure that they can avoid personal financial and legal responsibility in the event of such allegations, business owners and trained or licensed workers should purchase professional liability insurance.  An experienced independent business insurance agent will help them find the right policy.

Commercial general liability insurance typically excludes liability for property damage or bodily injury arising out of providing, or failing to provide professional services, but most CGL policies cover liability arising out of the use or maintenance of a professional office.  While having a CGL policy to cover accidents or harm involving their business’s premises is important, professionals like sanitarium operators, school principals, and exercise facility owners should consider buying professional liability insurance to protect their personal finances, and assist them in avoiding personal liability, in the event of a claim related to their services.

professional-liability-insuranceIndividuals in different professions usually require different kinds of professional liability insurance.  While surgeons, dentists, and doctors may have similar coverage in their policies, attorneys, hospitals, and beauty shop owners have varying options when it comes to buying insurance.  And, in some cases, a policy will be deemed an errors and omissions policy, while in others it will be referred to only as professional liability insurance.  A seasoned independent business insurance agent will discuss the kinds of coverage suited to a practitioner based on her particular line of business.

To help individuals assess their exposures when it comes to rendering professional services, an independent insurance agent will want to know whether any physical or emotional injury can potentially be caused to a client.  Also, he may ask about whether a business owner takes notes during meetings with customers, and how a professional office maintains client records.  He may inquire about the specific nature of professional services provided to clients, how often clients seek out these services, and whether the relationships between a professional and their clientele tend to last for a finite amount of time, or be ongoing.

By pursuing comprehensive professional liability insurance through a trusted independent insurance agent, business owners and other professionals can gain an understanding of the coverage afforded by policies from a number of insurers.  They can receive assistance in determining whether they should purchase commercial general liability insurance and professional liability coverage in a single policy, or through the same insurance company, and can get answers to their questions about limitations, exclusions, and endorsements.  They can also discuss premiums and other aspects of buying a policy.  With coverage through an independent business insurance agent, professionals know that they have dependable liability insurance in place to shield them from the risks inherent in their services.

Who Needs Errors and Omissions Insurance?

Errors & Omission Insurance (A/K/A Professional Liability) is insurance for professional people who provide a service or offer advice. It is meant to protect them from lawsuits or legal action taken against them as a result of advice or services they’ve provided that was proved negligent. It also provides them with help with defense costs during legal action which may even be declared groundless. Coverage does not protect against criminal prosecution or a range of liabilities not mention or covered in the policy.

There are many types of professional liability, ranging from malpractice for doctors and E & O Insurance for consultants, lawyers professional liability and brokers E&O. Contractors, accountants and insurance agents most often refer to a professional liability policy. Legal actions involve failure to act as well as acting improperly.

Medical Malpractice Insurance

Medical Malpractice Insurance is Professional Liability Insurance for people in the medical field. Those in the medical fields are risking potential liability every day on the job. In order to properly cover this liability they need a specialty commercial insurance policy.

Learn more about medical malpractice insurance ›

Lawyers Professional Liability

In representing clients, attorneys assume certain professional obligations and responsibilities. Unfortunately, in their capacity as advisors to their clients, they also take on certain risks. They need to protect themselves, along with their firm and staff, from this exposure to potential liability.

Learn more about legal professional liability insurance ›

E&O for Insurance Agents

Insurance Agent’s Professional Liability Insurance tends to be one of their largest expenses.

No one likes to admit they make errors, but we all do.  The size of the claim often is a bigger factor than whether or not you will be sued, much more than real culpability. A large uncovered liability loss or fire will have attorneys searching for a deep pocket.

Larger agencies have realized that simply being involved in thousands of transactions a month almost guarantees a Professional Liability Insurance claim every few years.

Learn more about errors and omissions for insurance agents ›

Many people are surprised to hear that they need professional liability when they serve on a board. Even serving as an unpaid volunteer may put you at risk of a potential liability. A trustee, director or officer on a community association, can be held personally liable for decisions and actions taken for an association.

Since personal liability policies differ from company to company, the coverage you need may be excluded in some policies. It is important that you speak with a local independent insurance agent to obtain the appropriate broad coverage.

It is important to know that no organization is immune from a lawsuit claiming a wrongful act. Can you afford to mount a personal legal defense that could easily cost thousands of dollars?

Loss from Professional Service Insurance

Attorneys serve various functions in representing their clients.  They are professional advisors, fiduciaries, and advocates.  In the course of their practice, lawyers may be vulnerable to a claim of a loss arising from providing these professional services to a current or former client or failing to provide necessary services.  To ensure that their firm, along with its assets and staff, and attorneys themselves are protected in the event of a claim of loss from a lawyer’s professional services, they should contact an experienced local independent commercial insurance agent to learn more about purchasing attorney professional liability insurance coverage that they can depend on for their practice.

Attorneys have various needs when it comes to commercial insurance coverage.  Lawyers may want personal property insurance for furniture and other items in the office, or coverage for improvements or betterments on the firm property.  In additional to having reliable property insurance for their firm’s facilities, they will also require professional liability insurance coverage in case of potential lawsuit as a result of their act, or omission while representing a client.

In meeting with an attorney to assess their firm’s needs for business insurance for a loss from professional services, an experienced independent insurance agent will consider factors like whether the lawyer or firm has had a loss in the past three years, or been dropped by an insurer for any reason other than that the company stopped writing that kind of commercial coverage.  An independent insurance agent will also ask about the nature of clients represented by the attorney, and the typical services provided to these clients, along with a firm’s practice areas, and the responsibilities of secretaries, receptionists, law clerks, and other staff in the office.

To properly protect attorneys from liability for an alleged loss from their professional services to a client, an independent insurance agent will consider whether a lawyer has a trust account, if the attorney practices in criminal or civil law, and whether a firm maintains copies of all files and legal documents for a certain amount of time after a case is resolved.  By assessing these and other factors, an independent insurance agent can determine the kinds of commercial insurance that will afford optimal protection for an attorney.

By connecting with a trusted local independent insurance agent, attorneys in all practice areas can gain an understanding of the kinds of professional liability insurance available, and get answers to their questions about modifying or supplementing existing commercial insurance, or buying a policy for the first time.  Whatever their commercial insurance needs, a knowledgeable independent insurance agent will recommend the right policy.  With the help of an independent insurance agent, attorneys can select coverage that can keep their firm and their practice secure.

In the course of representing clients, attorneys perform a variety of professional services.  They give legal advice, advocate and negotiate on their clients’ behalf, and act as a fiduciary.  While providing professional advice and legal services to clients, lawyers may be exposed to potential liability for property loss or damage sustained by a client, or another, or for professional negligence in the course of the representation.  To make sure that their own and their firm’s assets and property are safeguarded in the event of a professional negligence lawsuit, attorneys should contact a local independent commercial insurance agent to find out about supplementing existing professional liability insurance, or purchasing a policy for the first time.

Most commercial insurance policies have coverage for accidental personal injury in the course of representing a client, and other similar events.  Depending on a policy’s terms, in case of loss or damage incurred by a client as a result of a lawyer’s actions or potentially negligent professional services, professional liability insurance can cover most of the expenses associated with a defending against a claim.  An independent insurance agent, familiar with the challenges faced by attorneys who represent private clients, can recommend a policy tailored to their firm’s needs, and advise them as to the kinds of commercial coverage available, along with typical exclusions and limitations in most policies.

In determining the options for professional liability coverage suited to a particular attorney or firm, an independent insurance agent will ask questions about the services provided by an attorney, and whether an attorney ever stores or maintains clients’ personal property at their office.  Also, an independent insurance agent will evaluate factors like an attorney’s fee structure and how arrangements for client payments are made, how the firm ensures that documents are timely filed in the local courts, and how attorneys keep track of phone or email conversations with clients.  A seasoned independent insurance agent may also assess an attorney’s practices when it comes to returning files and belongings to clients after a matter is resolved, whether an attorney ever transports clients to and from meetings or court hearings, or how a lawyer accesses and maintains client’s financial documents, like bank account statements.

By reaching out to a local independent insurance agent, lawyers can gain an understanding of options for professional liability insurance.  They can get answers to their questions about coverage, and choose a policy suited to their firm’s business insurance requirements.  With a professional liability insurance policy through a local independent commercial insurance agent, lawyers know that in case of a property loss or damage, or a negligence claim, their firm and practice are secure.

Source: “Coverages Applicable – A Guide for Risk Management and Survey Work,” The Rough Notes Company, Inc., 2010, pp. 309-312

Source: “Coverages Applicable – A Guide for Risk Management and Survey Work,” The Rough Notes Company, Inc., 2010, pp. 309-312

While the majority of people want an agent involved in their purchase of insurance, many people want to see if they can save money by buying direct from the insurance company. Others want to try a direct quote to make sure the premium they’re now paying through their local agent is fair. If you want a quote for your coverage, click on the competitive quote button on the right side of this page.