Professional Liability

What Does Professional Liability Mean?

Professional liability refers to the risk of being sued for causing damage to another person as a result of one’s professional work. It specifically covers damages that occur due to a person’s work-related activities. If damages are caused outside of work, it falls under personal liability. This is the kind of risk that professional liability insurance is built around, and it usually shows up in fields where a client relies on the work of a licensed expert.

Insuranceopedia Explains Professional Liability

Professional liability insurance covers the costs associated with professional liability. If someone is sued for professional liability, this insurance will cover legal fees and settlements if the insured loses the case. These policies are tailored to address specific types of professional liability across various fields. For instance, a doctor would need malpractice insurance to cover medical liability. It also overlaps with general liability insurance in some cases, but the two cover different risks: general liability deals with bodily injury or property damage caused by your business, while professional liability deals with mistakes in the actual service you provide.

Personal liability insurance policies do not cover damages arising from professional liability, which can lead to complications. For example, if someone uses their personal vehicle for work, their personal auto insurance policy will not cover liability damages in the event of an accident. As a result, if the insured causes an accident while working, they will have no liability coverage. Therefore, it is crucial to have professional liability insurance to protect against potential losses related to one’s profession. Premiums vary widely based on your industry and claim history, so it’s worth comparing options when looking at small business insurance costs.