Professional Liability Insurance

What Does Professional Liability Insurance Mean?

Professional liability insurance protects business professionals, such as doctors, lawyers, and accountants, from claims of negligence and other related issues that clients may file. This type of insurance is essential for professionals with expertise in a specific field, as general liability insurance does not cover negligence, misrepresentation, malpractice, or other business errors or omissions that may occur. General liability typically responds to bodily injury and property damage claims from third parties, which is a separate set of risks from the advice or services a professional provides.

Insuranceopedia Explains Professional Liability Insurance

Even the most experienced business professionals can make mistakes, and even if no error occurs, a client may still file a lawsuit. For this reason, professional liability insurance is crucial, as lawsuits can be costly and potentially bankrupt a business. Depending on the industry, this insurance is often offered under different names, such as medical malpractice for doctors and physicians and errors & omissions for real estate agents. The cost varies widely by profession because the risk profile of each field differs, which is why law firm coverage is priced differently from coverage for an accounting practice or a consulting firm. Professional liability insurance is just one of many types of commercial insurance that can be highly beneficial to business professionals. After all, everyone makes mistakes.