a man pointing at a drawn picture of an umbrella to explain what professional liability insurance is and what it protects

What is Professional Liability Insurance?

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What type of insurance do you need for your business? Many different policies protect against loss, but you may need professional liability insurance to cover gaps. This insurance covers certain professions against claims initiated by clients, but are you eligible?

What is professional liability insurance? 

Professional liability insurance isn’t for everyone. Most individuals who obtain this type of insurance have a special expertise in a certain area that may not be protected through general liability. For example, a doctor, accountant, and lawyer may obtain professional liability insurance to protect against a negligence lawsuit or other claims initiated by a client.

Sometimes, professional liability insurance can be confusing because of all the different terms that refer to this insurance. For example, a medical professional wouldn’t request “professional liability insurance,” but rather “malpractice insurance.” An accountant may be in search of “errors and omissions (E&O) insurance.” Despite being different terminology, these are all the same type of insurance. 

Who can get professional liability insurance?

Doctors, accountants, and lawyers are just a few of the professions that purchase professional liability insurance. Small business owners and professionals have access to this type of insurance if they feel as though their general liability insurance doesn’t extend far enough to protect them against claims brought by former clients. 

Some of the most common individuals who get professional liability insurance include those in the medical field, insurance agents, consultants, brokers, attorneys, engineers, general contractors, plumbers, electricians, and other professionals in maintenance. Someone in financial services may also obtain this insurance for extra coverage. Sometimes even charities and nonprofit organizations also get professional liability insurance. 

What does professional liability insurance cover?

Depending on the field, professional liability insurance can cover a wide variety of lawsuits including alleged or actual negligence, defense costs, personal injury in the form of libel or slander, and copyright infringement. Some insurance policies cover more or less depending on the provider you choose.

The amount of coverage someone purchases is at their discretion. A professional should weigh how much a case could cost if brought to court. Then, once they determine the amounts, they can determine the adequate coverage they need to protect them from any personal loss. 

What doesn’t professional liability insurance cover?

It’s important to remember that professional liability insurance isn’t a general liability policy. These are two different types of coverage that offer different kinds of protection. For this reason, professional liability insurance doesn’t cover many things. You should never expect your professional liability policy to cover: 

  • Bodily injury
  • Property damage
  • Fraudulent acts
  • Employment issues
  • False advertising
  • Patents and trade secrets

These are all things that a general liability policy would cover. Some professional liability insurance also won’t protect you should any personal identifiable information released or lost under your care. Although, depending on the situation this can often be considered negligence—meaning your professional liability policy could help you deal with any damages for which a client may sue. 

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