Professional liability insurance

Professional liability insurance, also called Professional Indemnity Insurance, protects professional personnel such as psychologistss, psychiatristss, psychotherapists, and counselorss against potential negligence claims made by their patients/clients. Professional liability insurance may take on different names depending on the profession. For example, professional liability insurance in reference to the medical profession may be called Medical Malpractice.

The primary reason for professional liability coverage is that a typical general liability insurance policy will only respond to a bodily injury, property damage, personal injury or advertising injury claim. The above mentioned professional services and products can cause claims without causing a bodily injury, property damage, personal injury or advertising injury. Common reasons alleged in making claims on these policies are negligence, misrepresentation, violation of good faith and fair dealing, and inaccurate advice. For example, if a software product fails to perform properly, it may not cause physical damages, personal or advertising injuries, therefore the general liability policy would not be triggered. It may, however, directly cause financial losses which could potentially be attributed to the software developer's misrepresentation of the product capabilities.

Professional liability insurance policies are generally set up based on a claims-made basis, meaning that the policy only covers incidents that occurred during the timeframe in which the coverage was active. It is important to continue your coverage, because cancelling the policy, will in effect, make it as if you never had coverage.


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 * 3) Important questions to ask your insurance provider
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