Professional Liability Insurance: An Important Safety Net

Professional liability insurance, or professional indemnity, provides coverage to a person should he or she be sued due to his or her professional duties. Sometimes this liability insurance is called by various names. For example, doctors have malpractice insurance, while people in other professions may carry what is called an umbrella policy. These types of policies often cover a variety of expenses related to liability cases, including legal fees, attorneys, court costs, and settlements.


In the USA, many courts have awarded claimants gigantic settlements due to malpractice, negligence, unfulfilled contracts, and myriad other situations, making liability insurance absolutely necessary in some professions. In fact, it could be argued that almost anyone who deals with the public could use some kind of coverage. At the very least, almost any professional who could be held responsible for errors, omissions, or liability of any sort could benefit from carrying his or her own policy.

Professional liability covers the insured for things that might not be covered in a general liability insurance policy. General plans usually cover personal injury or property damage, but corporations and professionals often face claims that need a much more specific coverage. For example, a care provider could be found negligent, a therapist could be sued for giving bad advice, or a contractor could be sued for breach of contract.

Typically, these types of policies are offered for a term, which means coverage only exists as long as the insured keeps his or her policy in effect. Whatever the case may be, it is often far more cost effective to pay for insurance rather than end up paying huge sums of money in court costs, attorney’s fees, and settlements.

Freelancers and independent contractors now make a large part of the market share of new policyholders. Independent workers often do not have the protection of a company, organization, or guild, and therefore might be more vulnerable to liability and the costs therein. A sole proprietor has more of a chance of making – and being accountable for – the occasional mistake, so having a professional liability policy might be an extremely important safety net.

These kinds of policies cover a wide variety of losses, and so have just as wide a variety of options. Plans can be extremely inexpensive and simple, or can be exhaustive and costly. Whatever you choose, today’s society makes having some kind of liability coverage an almost mandatory business expense.

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