Generally, professional liability policies provide coverage for actual or alleged errors, omissions, negligence, breach of duty, misleading statements, and similar claims resulting from the performance—or non-performance—of professional services. Most policies cover both the defense costs (e.g. attorney fees, court costs) and settlements or judgements. Intentional wrongdoing is typically not covered.
If you have a “claims-made policy” or “prior acts coverage” with a retroactive date, coverage applies to claims arising from incidents that occurred prior to the effective date of your policy, as long as the claims are reported while your policy is in effect. If you have an “occurrence policy” or “extended reporting period”, coverage will apply to claims that are reported after the policy ends, as long as the incident occurred while the policy was in effect.
Nearly all professional liability policies vary in terms of their coverage options. Here are some questions you should consider during your search for a professional liability policy:
- Does your policy provide coverage for administrative or disciplinary proceeding brought by a governmental or regulatory body?
- What “triggers” coverage? Does a simple allegation, such as a statement made by a client, or does an actual written demand have to be made…or maybe a lawsuit must be filed and served before you are protected?
- If you need to take time away from your practice or your business for depositions, trial, etc., are you going to be compensated in any way for your lost income?
- Does the policy have a deductible? Does it apply to defense costs?
There are no right or wrong answers to any of these questions, but it is critical that you know what coverage your premium dollars are buying. Getting these questions answered should be part of the insurance buying process, since once you have a claim, it’s too late to find out what coverage you don’t have. Don’t make the common mistake of assuming that the policy that is handed to you is what you need.
We invite you to contact us today to learn more about professional liability protection through Foy Insurance. You may fill out the form on the right to be contacted by one of our Foy Insurance professionals, or give us a call to speak now. We look forward to serving you.