Businesses and individuals who provide professional and people centered services are liable to lawsuits from their clients. The lawsuits may be based on negligence or harm caused by a product, advice or service offered. Professional liability insurance seeks to protect businesses and professionals from these lawsuits.
Ideally, professionals have extensive knowledge in their respective areas of expertise. Moreover, there is an expectation to conduct their work in accordance to a code of conduct stipulated in their profession. When this does not happen, they can be held responsible legally for any resulting harm real or imagined. Regardless, liability insurance for professionals seeks to protect them.
Apart from negligence, some policies may cover civil liability such as breach of contract and defamation. The policy also takes care of the cost of defence such as attorney fees and expert witness charges. The damages awarded in a civil lawsuit are also taken care of by the policy. Coverage is only applicable as long as the services are provided by the insured individual or as long as the statue of limitations allows. This is called a “claims made” policy.
Claims made policy is usually applicable to insurance liability for professionals and has serious consequences if there are breaks in policy. Failure to renew the policy in time, natural disasters or any other event that may cause breaks in coverage result to a gap in coverage. Coverage is then only for claims that occurred in the time excluding in the gap. The alternative is a “claims occurring” policy which is rarely applied to this type of insurance liabilities.
There are two basis of cover-“any one claim” and aggregate policy. The former covers the full limit made in the period within which the policy holder was insured for each individual claim. The latter covers the full limit for all claims. Run off covers is an insurance policy that protects an individual once their business is no longer in existence. This is good liability insurance for retired professionals who do not wish to take care of lawsuits out of their own pockets.
There are different categories of professional insurance coverage. The first category serves fully fledged professionals who are licensed or registered such as professional liability insurance for pharmacists. The other category is for students. Students too should not be left out since they may be sued in case of malpractices. The last category is for individuals who are not fully licensed but are working towards a license. These are mostly post- masters and doctoral individuals under supervision while completing their training.
Most professions are obliged to have liability insurance by their professional bodies. However, even if not required, it is important to have it as a protection from lawsuits. Lawsuits cost so much in terms of legal fees, compensation as well as time and income lost. It is imperative to have an insurance expert work out your policy as the errors and omission policies are usually strongly worded and may not be very clear.
This insurance is for all professions, do not miss out. Get a free quote within five minutes via EasyCover.ca: Free Professional Liability Insurance Quotes Canada For those seeking more information such as a guide on finding the best professional liability insurance guide and the importance of it for professionals, such as nurses, pharmacists, engineers, accountants and more. The following site Investopedia.com provides a good definition: http://www.investopedia.com/terms/p/professional-liability-insurance.asp.