Glossary > Insurance > Business Insurance > Professional Liability Insurance (Errors & Omissions)

Professional Liability Coverage

Professional Liability Coverage, also known as Errors & Omissions Insurance, is a type of insurance that protects professionals from liability arising from errors, omissions, negligence, or failure to perform their professional services.

Example #1

For example, a financial advisor giving a client incorrect investment advice resulting in financial losses could be covered under Professional Liability Insurance.

Example #2

Another example is a software developer being sued for delivering a product that doesn't meet the agreed specifications could benefit from Professional Liability Coverage.

Misuse

Misuse of Professional Liability Coverage could involve attempting to claim for issues not related to professional services or intentionally providing subpar services knowing there is insurance coverage. It is crucial to prevent misuse to maintain the integrity of the insurance system and ensure fair compensation for legitimate claims.

Benefits

The benefit of Professional Liability Coverage is that it offers financial protection to professionals in case they make mistakes or are accused of negligence while performing their professional duties.

Conclusion

Professional Liability Coverage is a critical safeguard for professionals, offering peace of mind and protection against potential financial losses resulting from professional errors or negligence. By understanding and utilizing this coverage appropriately, professionals can enhance their credibility and trust with clients while mitigating risks in their business operations.

Last Modified: 4/29/2024