What is Professional Liability Insurance?

Professional liability insurance, is insurance which protects individuals or businesses from loss from a claim of alleged errors and omissions in the performance of professional services. It is also referred to as 'errors and omissions or E&O insurance. This is a speciality coverage typically for those who sell their knowledge or skills. Professional indemnity insurance' was the term used in the US in the past, and that term is still used in the UK and Australia today.

Who needs professional liability insurance?

If you sell your skills or your knowledge, it is a good idea to have a professional liability insurance policy. You should buy this in addition to your business owner's or in-home business policy to protect yourself, as this type of insurance responds to claims of professional liability in the delivery of your technical services. Professional liability insurance is not provided under homeowners policies or business owners policies.

Professional Liability Insurance Considerations

When buying professional liability insurance, it is important to note if your policy will cover legal defense costs and resulting judgments should you be brought to court. Also, be sure that the policy extends to those who work under you, such as 1099 contractors and hired employees. You may also want to include a personal injury clause to protect you from claims of slander, or libel. Lastly, be sure to add a copyright infringement or intellectual property infringement clause. This will protect you if a claim is brought against you alleging you stole a copyright or intellectual property.

Other Points to consider

Because there is often a long time between an event happened and the claim on that event, you want to make sure you are covered both when the event happened and when the claim is brought against you. Otherwise, you may find your policy falls short.