A Primer on Professional Liability Insurance

A Primer on Professional Liability InsuranceAny business that provides a professional service or advice to other businesses or individuals could find themselves in the middle of a legal battle at some point. While operating with a great deal of fear around possibly being hit with a claim or lawsuit isn’t a good rule of thumb, it does help to take the right steps to prevent a major fallout after a claim.

While trying to keep liabilities low, there’s still a possibility that a mistake can be made, which in turn comes back to haunt you. That’s why purchasing professional liability insurance, also known as errors and omissions insurance (E&O) is important.

Professional Liability Insurance: An Outline

Businesses should be operating with a general liability policy to cover things like medical expenses and bodily injury. But this kind of policy, while essential, doesn’t cover all risks, like an umbrella would. Claims not covered by a general liability insurance policy that are covered by a professional liability policy include negligence, violation of good faith, inaccurate advice, and misrepresentation.

In some states, regional coverage, like coverage offered through professional liability insurance CT providers, is required, especially for doctors and legal professionals. Legal and medical malpractice insurance policies are specific types of professional liability insurance.

Other professionals that should consider this type of coverage include accountants, architects, engineers, investment advisors, graphic designers, real estate agents and brokers, software developers, and more.

What’s Covered, What’s Not Covered, and Endorsements

Within professional liability policies, there are two routes to take: claims-made and occurrence. Most professional liability insurance CT policies are claims-made, which means that the policy must be in effect both when the event in question took place and when a lawsuit is filed for a claim to be paid.

An occurrence policy is the other type of insurance that is appropriate when someone changes their career or retires. This covers any claim for an event that took place during the period of coverage, even if the lawsuit is filed after the policy expires.

Professional liability insurance CT will pay the cost of legal defense against claims and payments of any judgments and settlements against a business, up to the policy limit. Other fees, including licensing board penalties, may be included in a policy as well.

Coverage doesn’t, however, extend to non-financial losses or losses that have been caused by intentional acts. If someone from a business knowingly and actively creates a problem that results in negligence, this insurance won’t step in and cover it.

A business looking to add this kind of coverage may be able to include professional liability insurance coverage in a commercial package policy (CPP). This would be noted as an endorsement to a policy.

About Byrnes Agency

At Byrnes Agency, we offer insurance solutions that can be tailored to meet your specific needs. Whether you’re looking for personal policies or commercial coverage, we have the right coverage for you. To learn more about our products, contact us today at one of our two locations.

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Dayville Office

Phone: (860) 774-8549

394 Lake Rd

Dayville, CT 06241

United States


Hours of Operation: Monday- Friday 9:00am-5:00pm

Norwich Office

Phone: (860) 886-5498

6 Consumers Avenue

Norwich, CT 06360

United States


Hours of Operation: Monday- Friday 9:00am-5:00pm