Posted by A good number of professional workers, such as lawyers, doctors, and the like, face daily financial challenges due to negligence and certain errors. So, there is a need to protect yourself from these financial losses, and to achieve that, you have to consider professional liability insurance for individuals.
To let you understand what this insurance is all about, we will be providing you with every vital piece of information concerning this insurance. So, just stick around while we walk you through this comprehensive read.
What is Professional Liability Insurance for Individuals?
Professional liability insurance for individuals, also known as errors and omissions insurance, is a type of insurance that protects professional individuals from financial losses that result from claims of negligence, errors, or omissions.
This insurance covers legal costs and other damages that are awarded in a civil lawsuit. It can also cover any settlements or judgments made against the professional, as long as they are within the limits of the policy.
Unlike general liability insurance, professional liability insurance does not cover bodily injury or damage to your property.
Who Needs Professional Liability Insurance?
This policy is necessary for any professional who provides advice or services to clients. This includes lawyers, accountants, doctors, dentists, architects, engineers, teachers, financial advisors, real estate agents, and other similar professionals.
If you’re in a profession that involves giving advice or providing a service, it’s important that you look into this insurance.
Some people feel that they are too careful to need this insurance, but the truth is, mistakes do happen, and if a client happens to sue you, you are assured of being relieved of the financial burdens.
What Does Professional Liability Insurance for Individuals Cover?
Below are the things that are covered by this insurance policy:
- Legal fees and costs
- Settlements or judgments
- Defense costs
- Expert witness fees
- Investigative costs.
Legal Fees and Costs
It covers the cost of hiring a lawyer to defend you in a lawsuit. The expenses can be huge, and having this insurance to cover them can be a big relief.
Settlements and Judgments
When a claim is made against you, it may be resolved through a settlement. In this case, you and the other party will have to agree on a financial amount to resolve the case.
Either way, professional liability insurance may cover the cost of the settlement or judgment, up to the limits of the policy.
This is important to know, as it can help protect your financial well-being if you’re found liable in a lawsuit.
Defense Cost
Professional liability insurance for individuals covers the expenses that are related to defending yourself in a lawsuit. This includes things like attorney fees, expert witness fees, court costs, and many more.
Expert Witness Fees
This policy covers expert witness fees. But who are the expert witnesses? Well, they are people who are called upon to testify in a trial because they have special knowledge or experience that’s relevant to the case.
For example, an expert witness might be a doctor who’s called to testify about the standard of care in a medical malpractice case.
Investigative Costs
Another defense fee is covered by this insurance. When a claim is made against you, your insurance company may hire an investigator to help gather information and evidence.
This can be expensive, but it’s often necessary to properly defend a case. If your policy covers investigative costs, it can help to take care of the cost of defending yourself.
What Does Professional Liability Insurance for Individuals Not Cover?
- Intentional acts
- Criminal acts
- Fraud
- Bodily injury or property damage
- War, riot, or civil commotion
- Nuclear hazard
Intentional Acts
Let’s say, for instance, that a doctor intentionally prescribes a fake drug to a patient and it lands him or her in a lawsuit. This policy does not take effect then.
Criminal Acts
So, if you were accused of a crime, your insurance would not cover the cost of your defense.
It’s important to understand that this doesn’t mean that you’re not innocent until proven guilty. The insurance simply doesn’t cover the costs associated with criminal acts.
Fraud
Fraud is considered an intentional act, and insurance is meant to cover unintentional acts. So, if you were accused of fraud, your insurance would not cover the cost of your defense.
What if you are not found guilty at last? Well, insurance providers are only concerned with whether the act was intentional or not, not with whether you were guilty.
Bodily Injury or Property Damage
Bodily injury and property damage are not covered by professional liability insurance due to certain reasons.
Firstly, these types of damages are typically covered by other types of insurance, like general liability insurance.
Secondly, professional liability insurance is meant to cover errors and omissions, not physical damages.
Thirdly, this type of insurance is meant to protect you from financial losses, not from physical harm. So, if someone is injured on your property or because of your actions, you would need a different type of insurance to cover their medical bills.
War, Riot, or Civil Commotion
These are not covered by professional liability insurance. This is because they are considered to be acts of God or events that are out of your control.
They are not considered to be errors or omissions, so they are not covered by this type of insurance. For example, if there was a war in your area and your business was damaged, your insurance would not cover the costs of repairs.
Nuclear Hazard
A nuclear hazard is another type of event that’s not covered by professional liability insurance. This is because it’s considered to be an act of God, like war, riot, or civil commotion.
In addition, it’s a type of risk that’s too big for most insurance companies to cover. This is because the potential damages from a nuclear hazard are so large that it would be impossible for an insurance company to pay out.
List of Professional Liability Insurance for Individuals
Below are the professional liability insurance companies for individuals:
Overview of Professional Liability Insurance for Individuals
1. Chubb
- Year Founded: 1882
- Location: USA
Description
Chubb is one of the top providers of professional liability insurance policies for individuals. They have a general professional liability policy that covers a wide range of professions.
Also, they have specific policies for certain professions, such as lawyers, doctors, and architects. All of their policies are customizable, so you can get the exact coverage you need concerning your budget.
Chubb has a smooth and easy claims process, so you can be sure that your claim will be handled in a timely and efficient manner.
2. The Hartford
- Year Founded: 1635
- Location: USA
Description
The Hartford is another great option for professionals who want to purchase liability insurance. They have a variety of products and services that can meet your needs.
Hartford has a strong financial rating, so you can be confident that they will be able to pay out any claims that you may have.
They work with their clients to help them identify and manage their risks, so they can avoid any potential claims in the future.
3. Travelers
- Year Founded: 1853
- Location: USA
Description
Travelers is another top company in the professional liability insurance space. They have a lot of experience in this area and are known for their customer service.
There are a variety of products that can meet your needs as a professional. Their policies are very competitively priced, and they offer a lot of flexibility when it comes to coverage.
4. CNA
- Year Founded: 1897
- Location: USA
Description
Known for its stability and financial buoyancy, this insurer has a lot of experience in this area and is known for its customer service.
They also have a variety of products and services that you can choose from, which can meet your needs as an individual. CNA has a lot of resources that can help you learn more about professional liability insurance.
5. Liberty Mutual
- Year Founded: 1912
- Location: USA
Description
Liberty Mutual has strong financial stability; hence, you can be confident that it will be around for the long term.
When it comes to experience, they are among the top companies to hold onto, and they also have top-notch customer service.
Liberty offers a variety of insurance products and services that can meet your needs, not to mention their focus on innovations that set them apart.
6. AIG
- Year Founded: 1919
- Location: China
Description
AIG has a long history of providing insurance products and services, and they are known for their financial strength.
They also have a strong claims process, so you can be sure that your claim will be handled quickly and efficiently.
AIG is also known for its customer service. They have a team of knowledgeable and helpful representatives who are always ready to assist you with any questions or concerns you may have.
7. AXA XL
- Year Founded: 1986
- Location: USA
Description
AXA XL is a subsidiary of the AXA Group, one of the largest insurance companies in the world. It offers a wide range of insurance products, such as professional liability insurance.
AXA XL is known for its strong financial strength and stability, and it has a strong reputation for paying claims promptly.
The company also has a strong focus on customer service, and it has a wide range of resources available to its customers.
8. Aon
- Year Founded: 1982
- Location: USA
Description
Aon is one of the leading professional services firms that offers a wide range of insurance and risk management solutions to individuals.
The company has a strong focus on innovation and is also recognized as a leader in the professional liability insurance industry.
Aon offers a variety of products and services, including risk management consulting, loss control, claims advocacy, and more.
9. Lockton
- Year Founded: 1966
- Location: USA
Description
Lockton is one of the largest independent insurance brokerage firms in the world. The company offers a wide range of insurance products, including professional liability insurance.
The company has a team of customer service experts who are available to help you with any questions or concerns you may have.
10. Arthur J. Gallagher & Co.
- Year Founded: 1927
- Location: USA
Description
Arthur J. Gallagher & Co., popularly known as Gallagher, is a global insurance brokerage and risk management firm.
Gallagher has a strong reputation for its expertise in the field of professional liability insurance. The company also commits to customer service, and it is known for its innovative approach to risk management.
How to Choose the Right Professional Liability Insurance Policy
Here are a few tips on how to choose the right professional liability insurance policy:
- Understand your risks
- Get quotes from multiple insurers
- Ask about discounts
- Read the policy carefully.
FAQs on Professional Liability Insurance for Individuals
Who needs professional liability insurance?
Well, there is actually no single answer to this question. This is because the need for professional liability insurance varies depending on the profession and the risks associated with that profession. However, generally speaking, any professional who provides advice or services to clients may need this type of insurance.
What does professional liability insurance cover?
Generally speaking, professional liability insurance covers the costs associated with defending a claim made against the insured professional. This includes legal fees, expert witness fees, court costs, etc. It may also cover damages resulting from the insured's negligence or mistake, such as medical expenses or lost income for a client.
What are the risks of not having professional liability insurance?
The risks of not having professional liability insurance can be severe. Without insurance protection, you could face significant financial losses if you are sued by a client. You may also suffer damage to your reputation if a claim is made against you. Also, you may have difficulty finding clients or work without insurance, as many clients require professionals to have insurance before they will do business with them
How do I file a claim if I need to use my professional liability insurance?
The process for filing a claim with your professional liability insurance company will vary depending on the company and the policy. However, there are some general steps you can follow to get started: Read your policy carefully to understand the terms and conditions of coverage, contact your insurance company to report the claim as soon as possible, gather any relevant documentation or evidence related to the claim, and lastly, cooperate with the insurance company and follow their instructions during the claims process.
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Conclusion
professional liability insurance is very important for professionals in different fields because it provides financial protection in the event of a lawsuit and can give peace of mind to both the professional and their clients.
If you’re a professional who doesn’t have this type of insurance, it’s worth exploring your options to see if it’s right for you.
It’s always a good idea to consult with an insurance agent to get more information and find the right policy for your needs.