Professional Liability Insurance
How Professional Liability Insurance Works
Relying on the profession, professional liability insurance may have completely different names, resembling medical malpractice insurance for the medical profession, and errors & omissions insurance for real estate agents. Professional liability insurance is a specialty coverage that is not provided under houseowners' endorsements, in-home business insurance policies, or enterprise-owners' policies. It only covers claims made in the course of the policy period.
Professional liability insurance policies are often arranged on a claims-made basis, which means coverage is good only for claims made through the policy period. Typical professional liability policies will indemnify the insured towards loss arising from any claim or claims made in the course of the policy interval by reason of any covered error, omission or negligent act committed in the conduct of the insured's professional business through the coverage period. Incidents occurring earlier than the coverage was activated will not be covered, though some insurance policies might embody a retroactive date.
What Professional Liability Insurance Does Not Embrace
Coverage doesn't embrace criminal prosecution, nor all forms of authorized liability under civil law, only these listed in the policy. Cyber liability, covering data breach and other technology points, might not necessarily be included in core policies. However, insurance that covers data security and different technology security-related issues is available as a separate policy.
Professional Liability Policy Wording
Some professional liability insurance policies are worded more tightly than others. While a number of policy wordings are designed to fulfill a said minimum approved wording, which makes them easier to check, others differ dramatically in the coverages they provide. For example, breach of duty could also be included if the incident happenred and was reported by the policyholder to the insurer during the policy period.
Wordings with major authorized differences will be confusingly similar to non-lawyers. For example, coverage for "negligent act, error or omission" indemnifies the policyholder against loss/circumstances incurred only as a result of any professional error or omission, or negligent act (i.e., the modifier "negligent" doesn't apply to all three classes, although any non-authorized reader may assume that it did). Meanwhile, a "negligent act, negligent error or negligent omission" clause is a much more restrictive coverage, which would deny coverage in a lawsuit alleging a non-negligent error or omission.
Example of Professional Liability Insurance
Medical malpractice insurance is a typical example of a type of professional liability insurance. Medical professionals do their work under the not inconsiderable risk of dealing with lawsuits for alleged medical malpractice, which is defined as an act or omission by a medical provider in which he or she provides remedy that falls beneath the usual of care, resulting in injury to or the death of the patient. While most medical malpractice cases are treated as civil torts in the United States, medical malpractice insurance can offset the price of such lawsuits to providers.
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