Professional liability insurance, or errors and omissions (E&O) insurance, is a type of coverage that protects certain individuals and corporations that provide professional services to their clients. For insurance purposes, “professionals” are defined as those who have special knowledge or skills in a certain area and who use those skills or knowledge to provide advice and services to others for a fee.
Doctors, lawyers, architects, engineers and accountants have always been considered “professionals” under this definition, and thus have had a need for professional liability coverage (also called malpractice insurance). But as negligence lawsuits against all kinds of businesses have increased, professional liability insurance has become a necessary line of defense for a variety of professionals. It is now commonplace for advertising and PR firms, Internet service providers, Web hosting companies and other types of firms to seek out professional liability coverage. It is also recommended for actuaries, real estate agents, insurance agents, appraisers, mortgage and securities brokers, business consultants and many others. The Andrew Agency has experience working with all types of professionals and will assist you in finding the right type of insurance.
What is Covered by Professional Liability Insurance?
Professional services firms can be sued for providing faulty advice, making errors, or if a client loses money due to negligence or an act of omission. If you provide professional advice of any kind to clients, errors and omissions insurance protects you, your partners, your employees and your partnership or corporation in cases of actual or alleged errors, loss of client data, negligent oversell, system failure and making misleading statements. It covers the costs associated with your legal defense, as well as any judgments or settlements that you are ordered to pay. Even if the claims against you are found to be false, defense costs alone can be financially devastating regardless of the size of your business.
Most professional liability policies are written to directly address your particular profession and area of expertise. Your general liability or other liability policies will not provide coverage if you are sued for professional negligence, so you do need this coverage if you are at risk for this kind of claim.
Professional liability policies usually exclude coverage for criminal, fraudulent or malicious acts; bodily injury or property damage (except in the case of medical malpractice); workers’ compensation claims; and punitive damages. Other exclusions may apply depending on your profession and your policy. Errors and omissions insurance is for liability claims directly related to the provision of professional services and the resulting financial loss for a client or customer. This type of insurance will not cover losses related to other areas of your business or other liability claims. For other types of claims, your general liability or other types of liability coverage will come into play.
Contact The Andrew Agency for Coverage
Professional liability policies vary greatly, and many options are available depending on your occupation and your needs. It is imperative that professionals that are at risk for these types of claims invest in professional liability insurance to protect themselves in the event of an unfortunate claim by a client. Work with The Andrew Agency to uncover your risks and ensure that you have appropriate coverage in Richmond, Virginia. Contact us today at (804) 320-2886.
