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Professional Liability Insurance

This coverage, also known as Errors and Omissions Insurance, is used to protect the traditional professional and quasi-professionals against legal liability resulting from a negligent act, error or omission in their performance of professional services. Most professional liability policies cover the economic losses suffered by others as opposed to bodily injury or property damage which is covered by the Commercial General Liability policy. The vast majority of professional liability policies are written on a claims-made basis. In many cases, written contracts require individuals or companies to carry specific limits of professional liability insurance.

Here is a partial list of professions or businesses that have an exposure to professional liability:

Software DevelopersAdvertising Agencies
Travel Agents
Web-Site Developers
Beauty Parlours
Interior Designers
PhysiotherapistsProperty Managers
DieticiansGraphic Designers
Employment AgenciesPhotographers
Financial Planners
Social Workers

Insurance Tips

A basic area of insurance management that deserves more attention than many firms give it is the selection of policy limits. Most uninsured losses are probably caused by selecting inadequate limits.

All insurance policies contain some type of requirement to report “as soon as possible” accidents or occurrences that may result in a claim. Failure to promptly notify your insurance broker or insurance company of known events that may lead to a liability claim can result in denied coverage for claims eventually made in conjunction with the occurrence.

Many companies make the mistake of not considering in advance the insurance implications of a new acquisition, merger, product or service. After the fact, companies often learn that they cannot obtain liability coverage or learn that it will be very expensive to cover. Consider approaching your insurance broker to find out the repercussions of your potential change in operations.

 It has become common practice for one party to require the other party to include it as an “additional insured” on their policy. Failure to add an “additional insured” to a policy can lead to uninsured losses. It is important to have a procedure in place to review all contracts that may have insurance requirements placed upon you.