What Does Professional Liability Insurance Cover?
Professional liability insurance, also known as errors and omissions insurance, is designed to protect businesses and individuals from claims alleging negligence, misrepresentation, or inadequate work in the provision of professional services. Here are the primary areas it covers:
- Negligence Claims: This insurance covers claims resulting from mistakes made in the professional services provided, ensuring you are protected against legal fees and settlements.
- Legal Defense Costs: Professional liability insurance includes coverage for attorney fees, court costs, and any other legal expenses incurred while defending against claims.
- Breach of Confidentiality: If a client’s confidential information is mishandled, this insurance provides coverage for claims related to data breaches or confidentiality violations.
- Inaccurate Advice or Service: It protects against claims related to providing incorrect advice, leading to financial loss for the client.
- Failure to Deliver Services: If you are accused of not following through on promised services, your policy may cover the financial repercussions.
It’s important for professionals, such as consultants, lawyers, and healthcare providers, to understand these coverages as they can significantly mitigate financial risks associated with their service offerings.