The basic need for Professional Liability insurance happens to be because general types of liability insurance do not cover this. Professionals who provide services that generally deal with information are advised to get one. Need a Professional Liability Insurance? Well, you need to understand it first. Read on, this article explains everything you must know about professional liability insurance. Meanwhile, check here for your General Liability Insurance.
Everything you must know about Professional Liability Insurance
In understanding Professional Liability Insurance, the outline of this article will include;
- Professional Liability Insurance Definition
- What Does Professional Liability Insurance Cover?
- Who needs professional liability Insurance?
- What are the costs of Professional Liability Insurance?
- Alternatives to a Professional Liability Insurance
Professional Liability Insurance Definition
Professional Liability insurance in its widest sense covers the costs against claims like negligence, inaccurate data, or even misrepresentation in some cases against a client to his professional.
Professionals like medical doctors, accountants, or even solicitors often enroll in this because they are much liable to be sued by an unsatisfied client for negligence or even malpractice and hence, the need for protection.
Professional Liability Insurance also has various names depending on the profession of the professional and damage claimed by the client. These names include; medical malpractice insurance, omission, and errors insurance.
This kind of insurance systematically works on a claims-made basis. This infers that coverage and claims can only be made as long as the policy is still valid. Although policies made by some insurance companies may be different, in general, incidents that may have occurred before the professional liability insurance was activated will not be covered.
What Does A Professional Liability Insurance Cover?
A professional Liability Insurance covers damages caused by the negligence, misrepresentation, or malpractice of a professional which includes;
- Breach of data
- Cyber liability
- Breach of duty
- Omission or negligence
- Infringement of copyright
Professional Liability insurance may be claimed if any of the above has caused damage to the client. Professional liability insurance also covers legal expenses and compensatory costs.
However, Professional Liability Insurance cannot be claimed for legal expenses like criminal prosecution or civil law crimes.
Who Needs A Professional Liability Insurance?
Certain professions have been listed as high-risk professions and although all business should get professional liability insurance, the following business needs it more than others;
- IT consultants
- Accountants
- Real estate agents
- Designers; marketing, graphics, photography
- Surveyors
- Health care personnel
- Architects
What are the costs of Professional Liability Insurance?
For professional liability insurance for any kind of profession, the average cost is pegged at about sixty dollars each month, amounting to a total of a hundred and eighty dollars annually. However, this may differ if you want to expand your coverage and it also may differ as per regions and states.
For small and medium scale businesses, the average cost for professional liability insurance is between $700 to $1800 every year. Also, this is subject to differences as per regions, coverage, and state.
Alternatives to a Professional Liability Insurance
There is no specific alternative to professional liability insurance. You could always get business liability insurance for your company as a business owner offering professional services instead of professional liability insurance.
General liability insurance also covers some of the covers of professional liability insurance, but then, professional liability insurance narrows damage coverage even more.
Conclusion
As a professional dealing with intellectual property or even rendering services, professional liability insurance is the best insurance policy for covering omission, negligence, and misrepresentation that may occur during the scope of service. However, this type of insurance policy does not cover damages made outside or before the policy activation.
