Last updated: November 24th, 2022
Reviewed by
Paige Geisler
Licensed Insurance Agent
However, general liability doesn’t usually cover claims against individuals in the company. If you work in a profession at high risk for lawsuits, you need more protection than general liability policies. That’s where professional liability insurance comes in.
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A professional liability insurance policy protects individuals from specific claims and lawsuits resulting from services provided within their professional capacities. The policies are designed to protect an individual from damage to their personal life and finances. Each policy has its own guidelines on what is or is not covered. Claims resulting from purported negligence, misrepresentation, errors, and omissions are generally covered. The degree of coverage can vary drastically, so it’s critical to make sure the policy you purchase fits your needs exactly.
Some liabilities aren’t covered by most insurers but might be added using supplemental policies or endorsements in some situations. Items not usually covered by a base professional liability insurance might include:
You’ll want to read your policy in detail to understand your actual coverage. Then, if you have questions, you should ask your insurance agent for clarification. They can pull up your specific policy to answer any questions.
Any professional with expertise in a specific field or who runs their own business should invest in professional liability insurance. A few examples of these professions include:
Professional liability insurance offers full or partial protection against the claims and lawsuits described in each of these situations. This type of insurance pays the claimant up to the coverage amount being sued for. This insurance can also cover the costs of legal services and court fees. Any amount granted to the claimant that’s above the coverage limit will be left to be paid by the defendant. This is another important reason your coverage should fit your needs.
Professional liability insurance costs vary significantly based on your location, coverage, profession, and insurance provider. The higher the risk for loss, the higher the cost of the insurance will be. Since there are so many considerations, it’s essential you shop around before selecting a policy.
Yes, professional liability insurance is the same as errors and omissions. For physicians, this insurance can also be called malpractice insurance. Different states and companies have different titles for this type of coverage, so make sure to go over the policy thoroughly with your insurance agent.
General liability insurance covers a company as an entity, whereas professional liability insurance covers the individual. A general liability policy might cover property or liability damages resulting from a product or service the company offers. However, it wouldn’t protect against a personal negligence claim against an individual. For example, a professional liability policy will protect against the errors and omissions of a single person, but it won’t cover injuries resulting from using the company’s products.
Many major insurance providers offer professional liability insurance policies. A few examples of these companies include GEICO, Progressive, State Farm, AIG, and Next Insurance. Any one of these companies can provide you with a quote and limits to their specific policies.
Brian is the founder and CEO of Insurist and carries Life, Health, and Property & Casualty licenses in all 50 U.S. states. Since 2013, Brian has been a member of Million Dollar Round Table, a designation for the top 1% of financial advisors worldwide. Brian has been featured in Yahoo! Finance, Money.com, Entrepreneur.com, Life Happens, Forbes, MSN, and Good Financial Cents. Brian’s goal is to show customers the best products, the quickest answers to their questions, and provide expert advice.
Paige is an assistant agent for State Farm and is licensed to sell property and casualty, health, and life insurance in Virginia. She handles all different types of insurance and financial services and is currently working on a securities and bonds license. Paige has a degree from Radford University in English and is a certified notary.
