Professional Liability

Understanding What Professional Liability Insurance Doesn’t Cover

5/9/2019 | Stephanie Marsh

Over the years, insurance agencies have created a number of different types of insurance policies for businesses. While this can be beneficial for companies looking to protect their operations on a number of levels, this is a great opportunity for confusion to settle in.

Some policies cover a broad array of scenarios while other include specific types of coverage and exclude others. When it comes to needing to use insurance, but not sure what exactly is covered, can create big problems for businesses. Finding out the insurance you purchased doesn’t cover the claim brought against you can result in even bigger headaches. One kind of insurance coverage that gets confused in terms of what it covers is professional liability insurance. Let’s see what it covers and what it doesn’t.

Professional Liability Insurance

Professional liability insurance is more commonly known as errors and omissions (E&O insurance) and is a special kind of coverage that protects businesses against claims. These claims can be related to the services provided by the business, but somehow ended up harming clients, be it financially, emotionally or physically.

Professional liability insurance can cover the cost of defending a company in a civil lawsuit and certain damages awarded. This kind of coverage is required by law in some areas for specific practices, including medical and legal services.

What’s Not Covered by Professional Liability Insurance

While professional liability insurance is very beneficial to have, it is not a blanket program, much like general liability insurance is. Businesses should be aware of some of the exclusions that are related to professional liability insurance to make sure they invest in additional insurance as needed.