Professional liability is a complex policy to explain. As the name “professional liability” implies, it is a liability policy that protects you from claims that you failed to properly perform a professional duty. Malpractice, professional indemnity and errors & omission policies are examples of professional liability policies.
The key reason for professional liability is that most general liability policies specifically exclude professional liability. As a result, any business that has the exposure should consider a professional liability policy.
Regarding some businesses, a professional liability policy could be more important than a general liability policy. Our office insures consultants. The consultants are required by contract to have general liability insurance, yet the consultant does not perform any of the work. The consultant draws the plans and supervises the work. The biggest liability exposure is professional.
The problems regarding professional liability policies include, they are generally:
greatly differ in coverage
defense costs can be included or outside of the policy limits
not commonly understood because of some differing concepts and terminology such as
claims made vs. occurrence form
self insured retention vs. deductible
extended reporting period
retro date vs. full prior acts
There are too many factors to mention and describe. A knowledgeable agent is very helpful with this class of commercial policy.