Professionals are burdened with an obligation to perform in accordance with promises they may have made, and they are required to perform in accordance with professional standards. These professional standards may sometimes involve a legal obligation, particularly when it comes to other people’s money, or their reputation. These exposures give rise to the need for professional liability insurance coverage.
What Is Covered
Although the type of professional covered by a professional liability policy is not specified, it most often involves physicians, architects, engineers, or those in the legal profession. Claims that may arise out of these professionals would typically involve an error or omission on the part of the professional that caused some type of financial harm to the claimant. Bodily injury and property damages are usually covered under a commercial general liability policy, so the professional liability policy will cover different types of damages that are mostly economic or financial in nature.
What Is Not Covered
Some important exclusions apply to a professional liability policy. A professional liability policy is not designed to cover bodily injuries or property damage. Damages relating to reputations are not covered under a professional liability policy. Libel, slander and defamation of character are covered as well. Slander is a public spoken statement that is defamatory and libel is a written publication that is defamatory against another individual. If an insured person negligently issues such a statement or publication and defamation results, a professional liability policy would respond to defend and indemnify an insured person.
Bodily injury, property damage and personal injuries are typically covered under a commercial general liability policy.
A general liability policy usually utilizes an occurrence based coverage trigger, which means that the date of the loss must fall within the policy period in order for coverage to apply. A professional liability policy has a different trigger known as a “claims-made” trigger, which means that the date a claim was made against the insured must fall within the policy period in order for coverage to apply, regardless of when the damaging event may have occurred.
A professional liability policy can involve complex coverage issues, so make sure you speak with a professional agent regarding your professional liability needs.