What Is Professional Liability Insurance?
Professional liability insurance, often called errors and omissions (E&O) insurance or professional indemnity insurance, protects professionals from claims of negligence, mistakes, or missed responsibilities. It’s essential for individuals and businesses that provide services, advice, or specialized expertise.
Below are common types of coverage included in a professional liability insurance policy.
Professional Liability Coverage
This coverage helps professionals respond to claims of negligence, errors, or omissions in the services they deliver. It covers legal defense costs, settlements, and judgments if a client claims the service caused them harm or loss.
Errors and Omissions (E&O) Insurance
E&O insurance covers service mistakes or failures. It applies to consultants, accountants, lawyers, engineers, real estate agents, IT professionals, and others who offer professional services. This protection helps reduce the financial impact of service-related disputes.
Malpractice Insurance
Medical professionals like doctors, nurses, therapists, and dentists use malpractice insurance to protect themselves from lawsuits. These lawsuits often claim improper treatment or failure to meet the standard of care. Malpractice coverage pays for legal costs and damages if a court finds the provider liable.
Cyber Liability Insurance
Cyber liability insurance protects professionals who manage client data or run online platforms. It covers costs tied to data breaches, ransomware attacks, and other cyber threats. Businesses that store sensitive information rely on this coverage to protect both their clients and themselves.
Media Liability Insurance
Media professionals, marketers, and publishers use media liability insurance to defend against defamation, copyright violations, or intellectual property disputes. This coverage helps media and advertising businesses avoid costly legal battles tied to their published content.
Directors and Officers (D&O) Insurance
D&O insurance protects business leaders from personal liability. It covers lawsuits that accuse directors or officers of mismanagement or poor decisions. The policy pays for legal fees and settlements, helping shield leadership from financial loss.
Employment Practices Liability Insurance (EPLI)
EPLI helps professionals and businesses respond to employee lawsuits. It covers claims of discrimination, harassment, wrongful termination, or retaliation. This insurance helps reduce legal risk in the workplace.
FAQs
Q: Do I need professional liability insurance if I already have general liability?
A: Yes. General liability covers physical risks like property damage or injuries. Professional liability protects you from service-related claims.
Q: What professionals need this type of insurance?
A: Anyone offering services or advice—such as consultants, accountants, IT pros, medical staff, or designers—should carry this coverage.