Professional Liability

What is Professional Liability? 

Specialty businesses and professionals face a unique exposure based on the services they provide. Professional Liability is a generic term that includes a few different “specialty” types of insurance for professionals ranging from doctors and lawyers to appraisers and notaries. Each provide a specific service and face unique exposures for which a standard General Liability will not cover. Professional Liability coverages can include coverage for negligence or alleged negligence, defense costs, Libel or Slander, and Copyright Infringement. 

What types of Professional Liability are there? 

Professional liability can cover:

  • Errors & Omissions (E&O) - covers professionals such as insurance agents, adjusters, real estate agents, accountants, architects, surveyors, and appraisers to name a few. This covers negligent acts or omissions that may result in financial harm to a third party 
  • Directors & Officers (D&O) – is written to protect the directors and officers of a corporation or other legal entity for wrongful acts committed while acting in their capacity as directors and officers. 
  • Medical Malpractice Insurance – for medical professionals such as doctors, surgeons, nurses, beauticians, dentists and even social workers whose negligent acts or omission may injure or harm the patient. This is the only form of professional liability that may include coverage for bodily injury. 
  • Employment Practices Liability Insurance (EPLI) – EPLI protects businesses from claims made by employees, former employees, or potential employees alleging their legal rights were violated. Violations can include: sexual harassment, discrimination, wrongful termination, or breach of employment contract.

How is Professional Liability written?

Coverage is typically written on a claims-made form but can also be written on an occurrence form. The claims made form requires claims to be made during the policy period. Claims may take years to develop, that is why most policies contain a “retroactive” date. The policy will cover claims made on or after the stated retroactive date on the policy. Some carriers offer “full prior acts” coverage to provide coverage for incidents that may have occurred in the past. 

What is typically excluded in a Professional Liability Policy?

Most carrier’s will exclude services that are covered under a General Liability policy so it is always best to check with your agent regarding any exclusions if you are unsure. Carrier’s typically exclude the following: 

Bodily Injury

Property Damage

Workers Compensation Claims 

False Advertisement 

Any personally identifiable information 

Any services performed that are not specifically mentioned and accepted by the carrier