Also referred to as errors and omissions insurance or an E&O policy, professional liability insurance is coverage for professional services such as accounting, medical or healthcare, and legal work from claims filed by their clients for acts of negligence. Many of the professionals working in these fields don’t have an accurate understanding of their risks. Educating them shows the value of purchasing a professional liability insurance policy.
Answering Your Clients’ Questions
You will find that many clients have the same questions or misunderstandings about their errors and omissions insurance policy. Here are some of the ones most frequently asked and how you can respond. Not addressing these issues may lead to claims against your own E&O policy.
1. Why Do I Need Professional Liability Insurance?
Your field has unique liabilities and risks that are directly connected to the decisions you make. While you may be the expert on the issue, clients or patients who feel they have been wronged or have suffered harm as the result of a decision you made. Allegations of misleading or omitting important information, claims of providing poor advice, or rendering services that fall below expected standards can all lead to expensive lawsuits and costly court settlements. PLI is a financial resource to resolve claims filed during a policy period.
2. Is a Professional Liability Policy Specifically Underwritten for My Exposures?
Because the liabilities between professional fields vary, it is crucial that each policy be underwritten to address your client’s unique needs. IT consultants will have different liabilities from those who work in marketing, and coverage terms are written with the inclusions and exclusions that are applicable to a specific profession. Your clients are able to choose the policy limits and deductibles that best fit their business needs, but the specific nature of underwriting means they are only going to be paying for coverage that they need.
3. Can I Lower My Insurance Premiums?
Insurance premiums can often be a concern for any business or professional, and the risks of your client’s field and past claims against them can impact the cost of coverage. It is important to address their exposures through risk management strategies, as it can reduce the number of claims filed against them and lower the financial risk the insurer is taking on.
4. What is the Difference Between Claims Made and Occurrence?
Claims made coverage will respond to liability claims that are made during the active policy period even if the incident occurred before obtaining the policy (although it will be subject to a retroactive date on the policy). Occurrence coverage is a policy that will cover incidents that occur during the period a policy was active, even if the claim is opened after the policy was terminated.
Proactively addressing your client’s questions can help them understand their need for coverage. You can more effectively serve your clients when you understand the concerns and have good answers for them.