Professional Liability Insurance, otherwise known as Errors and Omissions Insurance (E&O), is a form of liability insurance that protects professionals from claims of negligence. So what is covered by Professional Liability Insurance? It covers any claims during the policy period that is caused by any professional service or products provided by the policy holder that may result in a financial loss due to negligence or a failure to perform in the standard duty of care. More specifically, it covers any legal defence costs incurred and/or damages awarded from a successful claim.
Who Needs Professional Liability Insurance?
Traditionally, when we talk about a professional we think of a doctor or lawyer. Nowadays, the term professional applies to so much more. Any occupation that requires extensive training and education can be considered professional. Virtually anyone who provides a professional service, consultation or advice in return for financial compensation is vulnerable. An example of this is that more and more school teachers are finding that professional liability insurance is important as parents are increasingly taking legal action towards the schools for incidents in the classroom.
Why Do I Need Professional Liability Insurance?
The simple answer to that is peace of mind. Many professionals deal with interactions and transactions that could lead to serious repercussions on a daily basis. At times, other external factors can influence your ability to perform at your best. In an event that one of these countless interactions results in an unexpected loss, any claims made against you, whether they have grounds to sue or not, will be covered by your insurance policy. At the end of the day, Professional Liability Insurance allows you to practice and operate without the worry of an impending lawsuit.