Professional Liability Insurance!
Professional Liability Insurance, is your most critical coverage
If you are a contractor or subcontractor you will also be required to provide proof of Professional Liability Insurance, for example a Home Health Company
is seeing patients for a medical clinic, you will be required to provide proof of insurance and in some cases name the clinic as an additional insured on
your policy (again ask your Broker if your policy will provide such service and if there are any additional fees for this).
Why do I need Professional Liability?
You business provides a highly specialized service, and in most cases either you or your employees hold a professional license that lets people know
you are qualified in your field and you are a professional in that area. The public’s expectations of how you should perform your services might or might
not be in accordance with your profession's basic standards of conduct. This, coupled with huge judgments awarded by many juries in favor of plaintiffs,
make it more likely that you will be sued if you have an unhappy client or patient.
This is where Professional Liability would step in. In recent years, several trends have caused a substantial increase in the frequency and severity of
liability claims against professionals as well as the need for specific professional liability insurance coverage in the United States.
When choosing a Professional Liability Policy, there are many factors to consider. Too many people are taken in by mailers and advertisement by Brokers
touting they have the cheapest coverage and the quickest turn around, lower prices do not always mean you are getting the proper adequate coverage
needed for your profession.
Here are some questions to consider or ask your Broker:
Byrne - Kim's professionals can develop tailored solutions to mitigate any losses to your business. We have strong relationships with the major
insurance carriers, and this benefits our clients by broadening their coverage and market options. We also monitor the changing risk environment and
recommend any alternative approach that may offer you a better option.
Professional Liability Insurance, is your most critical coverage
- Professional Liability Insurance also known as E&O (errors & omissions) is designed to protect the business against claims of professional
negligence, or for failure to perform your professional duties. For this type of coverage, the business will need a separate Professional Liability -
E&O policy.
- Professional Liability Insurance protects your business against losses for claims made against you or your business for alleged negligent acts,
errors or omissions in the performance of your professional services, or failure to perform.
- The policy will normally pay for most judgments against you, including court costs (some policies pay outside the limits others pay within the
limits), check with your Broker when purchasing such policies.
If you are a contractor or subcontractor you will also be required to provide proof of Professional Liability Insurance, for example a Home Health Company
is seeing patients for a medical clinic, you will be required to provide proof of insurance and in some cases name the clinic as an additional insured on
your policy (again ask your Broker if your policy will provide such service and if there are any additional fees for this).
Why do I need Professional Liability?
You business provides a highly specialized service, and in most cases either you or your employees hold a professional license that lets people know
you are qualified in your field and you are a professional in that area. The public’s expectations of how you should perform your services might or might
not be in accordance with your profession's basic standards of conduct. This, coupled with huge judgments awarded by many juries in favor of plaintiffs,
make it more likely that you will be sued if you have an unhappy client or patient.
This is where Professional Liability would step in. In recent years, several trends have caused a substantial increase in the frequency and severity of
liability claims against professionals as well as the need for specific professional liability insurance coverage in the United States.
When choosing a Professional Liability Policy, there are many factors to consider. Too many people are taken in by mailers and advertisement by Brokers
touting they have the cheapest coverage and the quickest turn around, lower prices do not always mean you are getting the proper adequate coverage
needed for your profession.
Here are some questions to consider or ask your Broker:
- Are my limits high enough for my line of business, what is my worst case scenario?
- Is my defense inside or outside my limits, if they are inside does the carrier offer an endorsement for defense outside the limits (there is usually a
minimal charge for this). Remember if your defense is inside limits this will exhaust your aggregate, whether a claim is baseless or not mounting
legal defense can bankrupt your business. - Is my policy a Claims Made Policy or an Occurrence Policy? Always be sure to ask your Broker what type of form your policy is written on, most
often Professional Liability is written on a Claims Made Form, where as General Liability is often written on an Occurrence Form. This is very
important to know, otherwise it could result in your claims not being paid. If your Policy is written on a Claims Made Form you should also ask your
Broker what the coverage triggers are, as they differ from form to form, and what the requirements of reporting a claim entail. All Claims Made
Forms will have a Retro Date on your Declarations Page of your Policy, for example if you have had carrier A for the last 4 years, and you change
carriers you need to be sure that carrier B has offered you a retro date on your new policy that goes back those 4 years also, otherwise your Broker
needs to offer you Tail Coverage to cover any claims from that period that may arise later. (this form can be very expensive). Likewise if your Broker
offers you an Occurrence Form Policy, again you will require a Tail Policy to cover those past Policies. - Will my Policy extend coverage to subcontractors? Professional Liability insurance should protect your company from claims resulting from the
work done by 1099 subcontractors on your behalf. However, 1099 personnel need their own errors and omissions insurance because your
Professional Liability insurance policy may not defend them if they are sued separately or in addition to you. - What are my exclusions, always be sure to read and understand any exclusion included in your Policy. Certain Services or Risks may not be
covered by your Policy therefor putting your Company at risk.
Byrne - Kim's professionals can develop tailored solutions to mitigate any losses to your business. We have strong relationships with the major
insurance carriers, and this benefits our clients by broadening their coverage and market options. We also monitor the changing risk environment and
recommend any alternative approach that may offer you a better option.
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