Professional Liability insurance is also known as Malpractice Insurance or Errors and Omissions Insurance.
If you provide any sort of professional advising, you need Professional Liability insurance.
Properly arranged, this kind of insurance will provide three areas of important financial protection:
- Payment for a defense team
- Payments for settlements
- Payments for judgments
Payments for the defense team can be the most important part of this insurance, because you don’t have to make a material error or omission to be sued. Of course settlements and judgments are important too because these are losses that are difficult to quantify until rendered.
Choosing Professional Liability can be complicated. One of the most important features is the definition of your professional services; a broader definition is always better, but the definition needs to be reviewed in every case. Another is whether defense costs are included in the policy limit purchased or whether they do not count toward your total amount of insurance.