If you are a professional, you'll need to deal with all types of people throughout your career. It's not possible to keep all of them content. Someone or the other might be dissatisfied with the way you handle his case or demands. He might end up filing a lawsuit, charging you with negligence, misrepresentation or malpractice.
Your general liability insurance won't come to your aid at this point. Thus, you might have to pay the penalties out of your own pocket, if the verdicts are declared in the favor of your resentful client. Well, you can always get professional liability insurance for the extra protection, which will serve you during such times.
Professional liability insurance (PLI) also goes by the name of professional indemnity insurance (PII). Individuals or companies offering professional expertise or services can stay protected against the client charges, with this sort of insurance coverage. Read along to know the facts that describe professional liability insurance.
Facts to know about professional liability insurance
Professional liability insurance is especially required by those who are self employed and follow a particular profession. The following facts will hopefully give you a fair idea what it is all about:- General liability insurance usually provides protection against the direct damages, and not for the client claims or civil court penalties. Professional liability coverage comes into action when certain charges against the insured lead to legal actions in the future.
- This type of policy usually covers contract performance disputes, violation of good faith, unfair dealings, any financial loss due to negligence, error or omission in the services or the final goods delivered. It is more popularly known as the errors and omissions (E&O) insurance in the US.
- Professional liability coverage is crucial for those associated with certain fields or profession, especially medical or legal. Professionals following the conventional lines of work are sometimes legally bound to have this type of insurance protection, like the accountants, architects, engineers, insurance brokers etc.
- Any company can include this type of policy under their insurance portfolio, to be on guard against the client allegations. Company investors or VCs can also make use of its benefits.
- The coverage limits are determined by the policy holder. This type of policy usually covers the legal expenses, as long as it stays within the policy limits. Thus, it provides for the court costs along with any type of judgment that goes against the policyholder like the compensations which he has to pay etc.
- This type of policy not only provides financial protection to the insured individual or company, but also helps to maintain cordial relation with their respective clients.
- One of the most essential points to be remembered about professional liability insurance is that, it doesn't provide coverage for the criminal proceedings.
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