Types of Insurance Available
Professional & General Liability Insurance
Non-Owned & Hired Auto Liability Insurance
Excess Liability Insurance
- Professional & General Liability Insurance
Professional Liability insurance is a form of insurance designed to protect professionals and professional organizations from financial loss from their negligence. Professional liability insurance is made up of many segments, and is also called "errors and omissions", "E&O", or "malpractice" insurance.
Many different types of professionals hold themselves out to their clients as experts in a particular area. There is always a possibility that any professional's work may fail to meet their clients' expectations, resulting in a professional liability claim or lawsuit. Professional liability insurance is designed to protect the professional from the significant financial loss that can result from a lawsuit. Regardless of fault, litigation is costly, time consuming, and damaging to a reputation.
The exposures presented by professionals vary considerably. For example, the potential for claim and the types of claims are very different for a doctor than for a marketing consultant. And the same holds true for different types of doctors.
Because of these variables, professional liability policies come in a wide range of types and are offered by a wide range of insurers. Often, the best price, coverage and service option may be provided by a smaller specialty insurer rather than a well-known multi-lines insurer.
Professional liability policies typically provide coverage for the cost of losses associated with situations involving professional liability. These policies also include defense costs -- which can be quite substantial even if liability is not found. Policies typically do not provide coverage for non-financial losses or for intentional or dishonest acts. Professional liability policies are typically written on a claims-made basis.
(more information on claims made and occurrence forms)
General liability policies are quite different than professional liability policies. Do not depend upon general liability polices to provide protection from claims for professional negligence.
Professionals of all types are being held to higher standards of conduct than in the past, and lawsuits without merit have grown considerably throughout the recent past. They are continually exposed to the possibility of claims being made against them for negligent acts, errors, or omissions in connection with the services they provide.
- Non-Owned & Hired Auto Liability Insurance
Hired auto liability coverage will pay for damages to a third party, on behalf of your company, if you cause an accident or an injury to someone while you are driving a rented car or "non-owned" vehicle for business. For example, if you rent a car to visit a client, and cause an accident on the way there, the person you hit will look to your company to pay the damages. Without this coverage, your company may have no insurance coverage for a rented car.
The same scenario applies if you have an employee run an errand, or visits a client in his or her own car. When the employee causes the accident, the injured party is going to look to your company to pay for damages since the employee was using the car on company time. This can also apply if you casually ask a friend to pick up office supplies for you the next time they go to the office supply store and an accident occurs! The courts, needless to say, have been known to render some surprising decisions.
When you consider the nature of your business, this may be your single largest exposure!
- Excess Liability Insurance
Excess Liability Coverage is designed to add additional limits of liability (in layers of $1,000,000) to your primary, or underlying, liability policies. Since most primary liability insurance policies are written with limits of $1,000,000 per occurrence and $3,000,000 annual aggregate, in the event of a large claim limits of $1,000,000 (the maximum limit of the primary policy) might not be adequate.
Contractual requirements may be another reason to purchase excess liability. Excess liability limits can be written with maximum limits of $15,000,000 or more.
This information is designed for general informational and descriptive purposes only. The precise wording of each coverage is subject to specific conditions and endorsements of the actual policy issued. Always read your policy very carefully!