FRIDAY, JULY 17, 2020
 Professional service providers often have to gain a lot of trust from the people they serve. Should mistakes occur, then a lot of harm might result. If someone harmed as a result accuses your business of wrongdoing, then you might have to turn to professional liability insurance to help you cover the costs. Policies won’t cover everything, however, so you need to understand when your policy won't be able to help you.
Understanding Professional Liability Coverage
Another common name for professional liability insurance is malpractice insurance. Simply put, when a professional makes a mistake, even unintentionally, that negligence could harm someone else. The harmed person might sue the business or demand compensation.
Professional liability coverage can help the insured party fight the claim. It might pay for settlements, legal costs and other expenses for both the business and the affected person. It’s important to have because it can help you recover when unfortunate mistakes occur.
However, policies do limit what incidents they will cover. In these cases, you might have to look elsewhere for your coverage. Consider the losses that frequently are not covered by a policy:
- Property Damage & Bodily Injuries
Someone might visit your business, slip and fall, and sustain an injury. Or, you might damage an item belonging to someone else while making a house call. In these cases of physical loss, commercial general liability insurance might apply. This coverage is a bit different from professional liability insurance, but still necessary to have.
- Employee & Employment Claims
Professional liability policies will not apply to internal matters. For example, if an employee gets hurt on the job, then they will likely qualify for workers’ compensation. Should someone accuse you of professional misconduct towards interviewees, employees or those whom you let go, then you might need employment practices liability coverage to pay for the claim.
- Business Damage or Losses
Most liability policies don’t apply to losses of the business itself. Physical damage will need protection from commercial property insurance. A loss the business sustains because of an interruption in work (by a covered event) might have coverage under business interruption or income replacement insurance.
Most professional liability policies exclude certain mistakes or misconduct completely. Policies will not cover losses that result from criminal actions, for example. So, if your business gets sued under a criminal charge, then your policy likely will not help you out.
Professional liability policies vary from carrier to carrier. Therefore, examine your policy carefully to understand where coverage gaps might exist. Your agent can help you determine the best way to address these concerns.
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