Offering your skills and professional advice to people can come with its own risks; clients may file lawsuits against you for your professional help, and how do you cover for such expenses and loss? Well, this insurance covers you for such losses which happened as a result of your professional mistakes or negligence.
What Is Professional Liability Insurance?
Professional Liability Insurance is also known as Errors & Omission or Professional indemnity insurance. This insurance type covers the insured against legal liabilities that may arise due to error, omission or negligence claims filed against the insured.
Professional liability insurance only covers professional liability, which is any risk that occurs due to a person’s work or profession. General liability insurance policy and personal liability insurance do not cover for such risks; this is why professionals should purchase this insurance type to protect them in cases of professional errors and mistakes.
Why Do You Need Professional Liability Insurance?
If you are in the business of selling your knowledge or skills to others, you need to get this insurance to protect yourself from legal claims that may arise from professional negligence or mistakes. No one plans for this, but some clients may hold your profession liable for certain errors or problems; when file lawsuits against you, professional liability insurance is right there to help you handle such cases’ legal costs.
It may not be your fault, it may be your employee’s mistakes or negligence that led to the lawsuit, and you just need professional Indemnity insurance to back you up.
Without PI, you may be liable to pay for legal fees and compensation fees from your own pocket. You need this insurance if you:
- Offer your clients professional advice (professionals like doctor, counsellors, lawyers and consultants), then you need Professional Liability Insurance. If you offer artistic designs and services to your clients, if you are an architect or engineer, you need PI.
- Want to protect yourself from the cost of legal claims against you due to professional errors or omission.
- Client requires you to provide proof of this type of insurance before you sign a contract.
- You are required to have this insurance according to your association’s regulations.
Who needs professional liability insurance?
This insurance is specifically for professionals, and it covers payment for the cost of professional liability.
If you offer professional services to clients, you need to protect yourself in case of a lawsuit that arises due to omission or errors. These policies are designed to cover professions in different fields.
So, doctors can purchase malpractice insurance to cover for medical liabilities. Consultants can buy professional indemnity insurance to cover for lawsuits that may arise from professional advice they offered to clients.
Professions like doctors, engineers, consultants, architects, insurance brokers, financial advisers, accountants, solicitors and others.
However, this insurance policy is only applicable for acts leading to claims that take place during the period stated on the policy.
Professional Liability Insurance Coverage
Professional liability insurance covers legal liabilities that may arise due to omissions, negligence, and errors committed to providing professional help and services. It basically covers for:
- Professional liabilities
- Financial loss due to allegations
- Legal costs that arise as a result of lawsuits
- Negligence, breach of duty, professional omissions and errors.
Professional Liability Insurance Average Cost
Various factors determine the cost of this insurance and vary from one insurance company to another.
Depending on the amount of coverage and other factors, your insurance premium cost may be high or low. The general market offer may be within £6 a month and £53 a year.
You can protect yourself from costs and losses that may arise as a result of professional negligence, errors or omissions.
It provides the necessary protection you need when legal cases arise due to negligence claims or errors in the course of rendering professional help or services.