What is Professional Liability Insurance?

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Professional Liability (PLI), or more commonly known as errors and omissions insurance, covers service professionals in the US from financial loss due to legal defense costs. Good E&O coverage protects individuals and companies from assuming the full cost of defending a lawsuit that claims negligence of the individual or business. A claim of negligence, malpractice or misrepresentation is not covered under a general liability policy. This makes professional insurance crucial for those who provide a service or advice for a fee. Depending on the profession, errors and omissions insurance may take on different forms and names, like malpractice and E&O. Whether you’re a business owner or a real estate agent, your type of business or trade can drastically change your insurance coverage options.

Who Benefits from a Professional Liability Insurance Policy?

Any professional who provides a service, expertise or advice to clients for a fee can benefit from coverage against liability lawsuits. Even with quality employees and risk management practices in place, people still make mistakes. A general liability policy may not cover mistakes that could be made. Professional liability insurance will protect your business and its finances if such an event arises.

The number of liability lawsuits against professionals has increased in recent years. Many professionals within a variety of industries are at risk of being sued, whether the charges are valid or unfounded. Such lawsuits can mean financial ruin both professionally and personally, including the loss of cars, homes and careers. Professional liability insurance helps with the financial burden and personal injury of these events. Because of the exponential risk for some of these industries, choosing the right insurance company can be imperative.

 

Common industries for this type of insurance

• Real Estate Brokers & Appraisers
• Licensed Healthcare Professionals (Doctors, nurses, dentists, etc.)
• Travel Agents
• Notaries
• IT Firms and Freelancers
  

 

Medical Malpractice Insurance

A specialized type of professional liability which protects physicians, doctors, nurses from liability associated with wrongful practices resulting in bodily injury, medical expenses and property damage, as well as the cost of defending lawsuits related to such claims. The average payout for a settlement in a medical malpractice claim nationally is approximately $242,000. If your coverage is insufficient, you can be on the hook for paying the claim out of pocket. Even if you mostly work in an office environment, there can be drastic gaps in coverage between you and your company’s liability policy. Your company may also have exclusions in their policy that you may be unaware of. The average cost of a malpractice insurance policy depends on your location as well as the limits that you will be covered for. Most policies for average risk states will be between $4,000 and $18,000. Higher cost states such as California can easily reach up to $35,000 annually. Physicians can expect to pay around 3.2% of their salary but it can vary on a number of factors.

 

Choosing an experienced insurance agency is imperative to keep your career on the right track. Our agents can help you shop around to save you money over time while giving you the peace of mind that your career is safe. Reach out to us for a quick and painless quote with a professional insurance agent who understands your needs.