Glossary > Insurance > Business Insurance > General Liability Insurance

Incidental Malpractice Coverage

Incidental Malpractice Coverage is a type of insurance that provides protection for businesses in cases where professional services are provided incidentally to their primary business activities, and a mistake or error leads to financial loss for a client.

Example #1

A graphic design firm that offers occasional consulting services as an add-on to their main design services, but an error in the consulting advice leads to financial damages for the client.

Example #2

A software development company that includes basic IT support for clients but inadvertently causes system failure, resulting in financial loss for the client.

Misuse

Misusing Incidental Malpractice Coverage would involve intentionally providing poor quality or negligent professional services knowing that you have insurance coverage for such mistakes. This could lead to unethical behavior and harm to clients, eroding trust in the business community.

Benefits

The benefit of Incidental Malpractice Coverage is that it protects businesses from unexpected financial liabilities arising from unintentional errors or mistakes made while providing additional professional services. For example, if a business consultant accidentally advises a client to take a wrong financial decision, resulting in financial loss for the client, Incidental Malpractice Coverage can help cover the resulting damages.

Conclusion

Incidental Malpractice Coverage is crucial for businesses that offer professional services as a secondary or tangential part of their main operations. It helps safeguard businesses from unforeseen financial risks associated with errors or oversights in professional advice or services.

Last Modified: 4/29/2024