What Are the Basics of Professional Liability Insurance

a lawyer consulting clients

There are many professionals out there who must purchase liability insurance in order to conduct their line of work. Doctors in New Jersey, for example, purchase professional liability insurance in NJ to shield themselves from being sued, and lawyers as well hold professional liability policies in order to practice law in the United States. Real estate agents are also insurable professionals, which explains why most brokers purchase errors and omissions (E&O) coverage to shield themselves from instances where their services, or lack thereof, cause damage to clients. Below are some important points on liability insurance every professional should know.

Who Does Professional Liability Insurance Cover

Doctors, lawyers, architects, and other professionals purchase professional liability insurance, also known as E&O insurance. This kind of insurance is not only for individual practitioners; in fact, many businesses that offer professional services as well purchase policies to protect themselves from lawsuits and other claims.

A professional is someone who possesses the skills and expertise necessary to operate in a certain profession, and they are also bound by legal and ethical requirements. Engineers, architects, lawyers, physicians, and accountants are all considered traditional professionals, and these professionals must achieve high levels of education as well as meet relevant rules and standards in order to practice. Most traditional professionals receive licensing or certification, and many continue education throughout their careers. Professional liability insurance is purchased to shield those covered by a policy from damages that may amount from either their services or failure to provide services.

Here’s a list of businesses that typically purchase a form of E&O coverage:

a physician consulting a young man

  • Advertising agencies
  • Commercial printers
  • Internet service providers
  • Home inspection services
  • Public relations firms

What Does E&O Insurance Cover

There is no one-size-fits-all E&O policy, but a standard policy typically covers the professional who took out the policy as well as his/her partners and employees. A policy covers those under it from lawsuits and claims relating to a professional’s delivery of services. Damages are usually monetary. Medical E&O insurance is different in that it covers bodily injury and/or property damage, but only if it can be proven the damages are a direct result of the services offered by the professional.

A claim must be made during the policy period so coverage can apply, though some brokers offer retroactive coverage; these policies are typically limited in how much they can redress. In order for a claim to hold, a policyholder must not know about the claim, or of a situation that could result in a claim, before the policy is taken out.

Where to Get First-Rate Professional Liability Insurance

If you’ve been looking for high-quality E&O insurance, consider us here at Cobalt Steele. We have been offering reliable coverage for several years, and our services are ideal for