No one ever wants to think about the possibility of being sued for malpractice or some other type of professional misconduct, but the fact is that it could happen to any expert at any time. That’s why it’s important to have professional liability insurance, also known as errors and omissions (E&O) insurance. This type of insurance can protect you if you are sued for damages related to your professional work.

But what exactly is professional liability insurance, and how does it work? Here are six things you should know about this important type of insurance coverage.

Professional vs. General Liability Insurance

First, it’s important to understand the difference between professional liability insurance and general liability insurance. General liability insurance is designed to protect businesses from third-party claims of bodily injury, property damage, or personal injury (such as slander or libel). Professional liability insurance, on the other hand, is specifically designed to protect professionals from claims of errors or omissions in their work.

So, if you’re a doctor, lawyer, accountant, or architect, you need this sort of liability insurance. There is professional liability insurance for physicians, lawyers, accountants, architects, and a variety of other professionals. But if you own a retail store, for example, you would need general liability insurance.

What Does It Cover?

This type of liability insurance can cover a wide range of potential risks, including:

• Malpractice
• Negligence
• Wrongful advice
• Breach of contract
• Violation of good faith and fair dealing
• Copyright infringement
• Libel and slander

In other words, if you are sued for damages related to your professional work, your policy can help you pay for legal expenses and any settlement or judgment that may be awarded against you.

How Much Does It Cost?

The cost of professional liability insurance varies depending on several factors, including the type of business you have, your revenue, the number of employees you have, and the amount of coverage you need. Generally speaking, the higher your revenue and the more employees you have, the more expensive your insurance will be.

But keep in mind that the cost of not having professional liability insurance can be much higher than the cost of the insurance itself. If you are sued for professional errors or omissions and you don’t have insurance, you could be on the hook for legal expenses, settlements, and judgments that can easily reach hundreds of thousands or even millions of dollars.

How Can You Get It?

If you’re looking for this sort of insurance, the best place to start is with your current business insurance agent or broker. Many business insurance policies include some form of professional liability coverage, so it’s worth asking about.

You can also purchase standalone professional liability insurance policies from a variety of insurers. When shopping for a policy, be sure to compare the coverage, deductibles, and costs of several different policies to find the one that best meets your needs. You can also check out online reviews of insurers such as these simply business insurance reviews to help inform your choice. This is always a good place to start when researching a policy and insurer for your business.

How Long Does the Coverage Last?

Most policies are “occurrence-based,” which means they provide coverage for claims that arise from events that take place during the policy period, even if the claim is filed after the policy has expired. So, if you have a professional liability insurance policy with a term of three years, and you are sued for an event that took place during those three years, your policy will still provide coverage.

Some insurers also offer “claims-made” policies, which only provide coverage for claims that are filed during the policy period. So, if you have a three-year “claims-made” policy and you are sued for an event that took place after the policy expired, you will not have any coverage.

It’s important to understand the difference between “occurrence-based” and “claims-made” policies before you purchase a professional liability insurance policy. Be sure to ask your insurance agent or broker about the type of policy you are considering.

Is This Insurance Required by Law?

In most cases, professional liability insurance is not required by law. However, there are a few exceptions. For example, many states require physicians and other healthcare professionals to have medical malpractice insurance.

While this sort of insurance is not required by law in most cases, many professional organizations require their members to carry it. For example, the American Institute of Architects requires its members to carry professional liability insurance.

And even if you’re not required to have professional liability insurance, it’s always a good idea to have it. After all, it’s better to be safe than sorry.

Professional liability insurance is something that all professionals should have. While it may seem like an unnecessary expense, this type of insurance can protect you if you are sued for malpractice or some other type of professional error.

Therefore, it is important to understand what it is, how it can help you, and how you can get it.