Professional Liability Insurance

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Professional Liability Insurance

Professional liability insurance (PLI) is a type of liability insurance required to protect organizations that provide services or consult for various companies. A claim of carelessness can be devastating to a growing company, especially if the claim results in monetary damages.   

Stampede Insurance provides years of experience evaluating risks associated with multiple services in various industries. Read on to learn why you should explore PLI with Stampede Insurance.

What To Know About Professional Liability Insurance

Professional liability insurance is a unique type of coverage not available through homeowners' endorsements, in-home business policies, or company owners' policies. Only claims made within the insurance period are covered. It is typically set up on a claims-made basis, implying that coverage is only valid for claims filed within the policy period.

Professional liability insurance policies will cover the insured for any losses incurred due to any claim or claims filed during the policy period. Even if you did nothing wrong, your client has the right to sue your company if they believe you made a mistake. You'll have to pay for pricey legal defense charges out of pocket if you don't have coverage.

Professional Liability Insurance Coverage 

Professional liability comes in a variety of shapes and sizes. The following are some of the types of coverage that are included:

  • Crime
  • Fidelity
  • Medical Practitioner
  • Liability for Pollution

Professional liability insurance does not provide coverage for all types of claims. It won't help your business with claims of the following: 

  • Bodily injury or property damage
  • Work-related injuries or illnesses
  • Data breach

Professional Liability Insurance vs. General Liability Insurance

The key distinction between general (GLI) and professional liability (PLI) insurance is the types of risks they cover. Physical risks such as bodily injury and property damage are covered by general liability insurance. Conversely, professional liability insurance protects your company against more abstract risks like errors and omissions in its services.

Moreover, GLI safeguards your organization from the most common claims that any firm may face. Meanwhile, PLI protects you from lawsuits filed by third parties who allege service breaches within a contract.

A few of the situations to consider to differentiate the need for a PLI from GLI are:

Professional Liability InsuranceGeneral Liability Insurance
Professional services were provided with carelessness. Defaulted on contractual obligations. Work was incomplete or of poor quality. Errors or omissions were madeThey were injured on your commercial property and suffered bodily harm. You caused them property damage. There is a lawsuit on slander, libel, misappropriation, or copyright infringement

Who Should Purchase Professional Liability Insurance?

Some states may require professional liability insurance for specific firms. Medical malpractice insurance, for example, is a sort of professional liability insurance that healthcare professionals require.

If your clients demand it when you sign a contract, you may be required to obtain professional liability insurance. Whether or not you're required by law to have professional liability insurance, it's critical to secure the coverage you need, especially if you interact with clients or customers on a daily basis. 

PLI would be beneficial to the following companies or businesses:

  • Attorneys or legal firms
  • Professionals or consultants
  • Accountants and tax preparers are both types of accountants
  • Brokers and house inspectors
  • IT Professionals
  • Medical professionals

Factors Affecting The Cost Of Professional Liability Insurance

Depending on the size of an organization, PLI may cost less or more. You should be aware of which systems and credentials might affect your application. The following are some general considerations that can affect the cost of professional liability insurance:

  • Type of company
  • Limits on policy coverage
  • Employees' number
  • Years in the industry
  • Location
  • History of Claims

Frequently Asked Questions About Professional Liability Insurance

Read these FAQs for more information to further understand the importance of getting professional liability insurance.

What isn't covered by liability insurance?

After an accident, liability coverage usually does not pay to repair damage to your automobile; collision coverage does. Repairing damage caused by other events, such as hail, is also not cost-effective — this is where comprehensive coverage comes in.

What is the distinction between personal liability insurance and professional liability insurance?

The key distinction between general and professional liability is the types of risks they cover. Physical risks such as bodily injury and property damage are covered by general liability insurance. Professional liability insurance protects your company against more abstract risks like errors and omissions in its services.

Who should be covered by professional liability insurance?

Professional liability insurance should be considered by every company that sells its knowledge. This coverage, often known as errors and omissions (E&O) insurance, protects your organization and its bottom line from claims of late, incomplete, or poor work from customers. These kinds of accusations can lead to expensive lawsuits.

Protect Your Business With Stampede Insurance 

Professional liability nsurance defends professionals like accountants, lawyers, and physicians against charges of negligence and other wrongdoing brought by their clients. Since General liability insurance (GLI) policies do not cover claims stemming from business or professional practices such as carelessness, malpractice, or misrepresentation, professionals who have expertise in a certain area require this form of insurance.

Maximize business solutions for your company and work with professionals at Stampede Insurance to get a thorough evaluation of your liability risks unique to your business. 

Professional Liability Insurance At Stampede Insurance

It is good for every company that sells knowledge and services to get professional liability insurance. Learn more from our pros at Stampede Insurance.

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