Who Needs Professional Liability Insurance?

Essentially all businesses should consider this insurance. General liability won’t cover everything. 

Difference Between General Liability and Professional Liability 

General liability and professional liability both cover accidents, but they cover accidents of different natures. General liability insurance covers claims concerning non-professional negligent accidents of bodily injury and property damage that occur on the commercial property. For example, if a server in your restaurant forgets to place a wet floor sign and a guest slips and is injured, this accident would be covered under general liability insurance. 

Among the range of industries that use this insurance, coverage may be called a different name. In the medical field, professional liability insurance is known as medical malpractice insurance. In most other industries across the U.S., professional liability insurance is called errors and omissions insurance (E&O insurance). 

Even if your profession (or your company’s profession) is not listed above, this doesn’t mean that you won’t need professional liability insurance. Any business or individual providing expertise or professional services need coverage, as general liability insurance won’t cover these accidents. 

Do Businesses Provide Professional Liability Insurance? 

Many businesses, such as hospitals, clinics and insurance agencies, may provide a measure of professional liability insurance. It’s often recommended that professionals at particular risk invest in a personal professional liability policy, however. Professionals such as surgeons and lawyers face some of the highest rates of professional liability risk that may not be completely covered under an employer’s policy. An employer’s policy may also not follow you once you transfer jobs. In the period of time where you’re transitioning between jobs, there could be a gap in coverage that leaves you without assistance. A single lawsuit could add up to millions of dollars, which not many people have available out of pocket. 

How Much is Professional Liability Insurance? 

The cost of professional liability insurance depends on a variety of factors, such as the industry, claims history and policy limits. Choosing a higher deductible may lower your premiums, but it also means paying more upfront when it comes time to file a claim. These prices may also fluctuate depending on your location. Certain areas are known for having a higher rate of lawsuits. New York, for example, is the number one state for lawsuits, especially when it comes to medical malpractice. Living in and providing services for people in these areas can raise your premiums. 

Make sure to speak with your employer about the professional liability insurance available to you and consider an additional personal policy to make sure you are protected.