terms "Professional Liability," "Errors & Omissions,"
& "Malpractice," are used for the most part interchangeably.
These refer to liability claims for injury, damage and/or financial
loss arising from the performance of a very long and diverse list
of professional services or activities. (For certain categories,
professional liability insurance may include libel, slander, invasion
of privacy, copyright & trademark violation, etc.)
Underwriters will normally exclude professional liability claims
from ordinary commercial liability insurance policies where they
feel there is exposure. A representative sampling of categories
with professional liability exposure would include medical/dental
professionals, corporate directors & officers, architects &
engineers, publishers & broadcasters, attorneys, financial service
providers, consultants, travel agents, public officials, employment
agents, insurance agents & brokers, real estate agents &
brokers, beauticians & barbers, and software and various other
application for professional liability is especially important,
because most underwriters attach it to the insurance contract and
designate the information a warranty. It is therefore imperative
that accurate information be given.
typically carry a deductible of from $250 up to $2,500 or more,
sometimes applying to all loss costs (including costs of investigating
claims, etc.), sometimes applying only to actual paid claims. Certain
policies may apply the policy limit to include defense costs, each
dollar of such costs reducing your available limit for the payment
of professional liability insurance is written on the so-called
"Claims Made" policy
form. Some policies may also bear a "Retroactive Date,"
excluding claims arising from any activities or services performed
prior to that particular date.
common general liability policies, professional liability insurance
may allow you the option of rejecting proposed settlements. The
down side is they also will usually make you responsible for all
loss payments exceeding the amounts they proposed, when the the
final litigation or other eventual outcome becomes known.
type of insurance varies widely and policies must be read very carefully
to determine what is covered. Premium determinants also vary widely,
but normally rest on the volume of your activity (measured in gross
revenue), along with underwriters' assessment of your degree of
hazard by business category.