Call (702) 541-0882 for professional liability insurance quotes.
Professional Liability insurance is the same as Errors and Omissions Policy or Malpractice Insurance. These are all different names for the same kind of policy.
Malpractice insurance tends to be used for physicians, nurses and other members of the medical field. Errors and Omissions tends to be used for realtors, accountants, technology professionals. Professional liability is the term used for all other professions.
Professionals that operate their own businesses need professional liability insurance in addition to an in-home business or Business Owner’s policy. This protects them against financial losses from lawsuits filed against them by their clients. Professionals are expected to have extensive technical knowledge or training in their particular area of expertise. They are also expected to perform the services for which they were hired, according to the standards of conduct in their profession. If they fail to use the degree of skill expected of them, they can be held responsible in a court of law for any harm they cause to another person or business. When liability is limited to acts of negligence, professional liability insurance may be called “errors and omissions” liability.
Professional liability insurance is a specialty coverage. Professional liability coverage is not provided under homeowners endorsements, in-home business policies or Business Owner’s policies (BOPs).
Professional liability insurance coverage gives your business protection from the risks you face in delivering your professional services.
You should consider professional liability insurance coverage if your business:
- provides a professional service.
- regularly gives advice to clients.
- is requested by a client to have professional liability insurance to complete a contract.
Professionals that should consider professional liability are:
- Abused Victim Shelter
- Activity Center
- Advertising Agency
- Application Service Provider
- American Legion
- Accountants or Auditors
- Big Brother Big Sister
- Booster Club
- Botanical Garden
- Car Club
- Chamber of Commerce
- Claims Adjusters
- Cloud Provider
- Condo Associations
- Consultants and Counselors
- Data Storage and Administration
- Elks Lodge
- Food Bank
- Group Home
- Dog Groomer
- Historical Society
- Home Health
- Homeless Shelter
- Homeowner Association
- IT Consultant
- Learning Disorder Service
- Masonic Lodge
- Medical professionals
- Parent Teacher Organization
- Performing Arts
- Personal Training
- Public notaries
- Reading Program
- Real Estate Agents and Brokers
- Sober Living
- Software Developer
- Soup Kitchen
- Thrift Store
- Townhouse Association
- Townhome Association
- Trade Association
- Transitional Housing
- Travel agent
- Website Developer
- and more….
Professional liability insurance protects small businesses by covering the costs of client lawsuits claiming substandard work. A client may claim your negligence caused them financial harm. And a client that thinks you cost them money may take legal action in hopes of recovering their losses.
Professional liability can cover the costs of lawsuits over:
- Accusations of negligence
- Budget overruns or project delays
- Breach of contract
- Incomplete work
- Missed deadlines
- Undelivered services
- Work errors or oversights
Successfully defending yourself in court can be expensive. Professional liability insurance will cover those costs and help ensure your business stays afloat.
TECHNICAL ERRORS AND OMISSIONS
A Tech E&O policy can cover costs for legal defense, settlements and breach of contract allegations. Attorney fees for court cases or settlement negotiations outside of a court can add up quickly even when your business is not at fault. Many businesses large & small do not have the funds to cover these expenses. For example, suppose a company creates software for organizing documents. If this software caused their client’s systems to crash and they can no longer do business, the software company could be at fault. In this circumstance a lawsuit could potentially ruin your business without a Tech E&O policy in place. With a properly written Tech E&O policy in force coverage could be provided for defense costs, settlement expenses and potentially lost income during the court case. The Tech E&O policy is there to take care of all the risks arising from technology related services.
Example: A compnay is hired to design a fully functional interactive website for a communication company. After 6 months, the developer fails to deliver the website as promised in their contract and the company must hire another developer to finish the website. The communication company sues and claims damages of $3,000,000 which includes the increased cost to complete the website, lost profits because of the delay in the delivery and the market value of the website.
Coverage can include:
- Defense outside the limit available
- Limits available up to 15 million (higher limits available through excess)
- Breach of contract coverage available
- Can combine the Tech E&O, Miscellaneous E&O, Technology Products, General Liability, and Cyber Liability on one policy
- Full prior acts coverage available even for first time buyer
- Coverage for mental anguish and distress
- Additional insured status available
- Covered services can include Miscellaneous E&O exposures
- Deductibles start at $0
- Risk management services available to policy holders for no charge
- Media and intellectual property coverage built into policy forms
COMPLEX ACTUAL CLAIMS
An optometrist prescribes eyeglass lenses with an incorrect astigmatism correction. While wearing the glasses, the customer falls down stairs and suffers an injury because his vision is distorted by the incorrect prescription.
A claim is made for the customer’s medical expenses to treat the injuries, including pain and suffering, for an amount of $20,000.
An advertising agency developed a campaign for a major client that involved the production of a series of television commercials. The agency subcontracted the commercial’s background music to a local freelance musician. After the commercial aired, another musician claimed the music used in the commercial had been copied without her permission from a work she had previously recorded.
The agency and its client were sued in a $100,000 copyright infringement claim
A groomer nicks a tendon in a dog’s leg while grooming the dog with a shaver. A claim is made for the veterinary care expenses associated with the dog’s injury.
The cost to cover the injury was $3,800
POOR PLACEMENT DECISION
A placement agency was hired to locate a qualified candidate to run a client’s human resources department. The agency recommended a candidate with management experience but failed to recommend a candidate with a human resources background. After the client hired the recommended candidate, it later terminated the person for lacking proper qualifications. The client hired an attorney to collect damages incurred as a result of the negligent placement. In addition, the client had to retain an outside human resources provider to perform these functions while a replacement was found.
It cost over $175,000, including defense and settlement costs .
A travel agent booked a trip around the world for an elderly couple celebrating their 50th wedding anniversary. The husband, who purchased the trip, mentioned that his wife needed handicapped access for the entire trip, which included hotel stays. He called to check on the planning of the trip multiple times and reconfirmed the handicapped access. When the couple arrived in London, they discovered that their hotel had no handicapped access because of the age of the building. The husband was furious and called the agency to demand a refund. The agency rebooked the London leg of the trip and reconfirmed all of the couple’s other accommodations. This cost the couple an additional $10,000 as the trip was being changed at the last minute. They demanded reimbursement for this charge. The additional expenses exceeded $15,000.
The Travelers Indemnity Company and its property casualty provided this to me.
This material does not amend, or otherwise affect, the provisions or coverages of any insurance policy or bond issued by Travelers. It is not a representation that coverage does or does not exist for any particular claim or loss under any such policy or bond. Coverage depends on the facts and circumstances involved in the claim or loss, all applicable policy or bond provisions, and any applicable law. Availability of coverage referenced in this document can depend on underwriting qualifications and state regulations. © 2021 The Travelers Indemnity Company. All rights reserved. Travelers and the Travelers Umbrella logo are registered trademarks of The Travelers Indemnity Company in the U.S. and other countries. BSLSS.0099-D Rev. 3-21
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