Errors & Omissions (Professional Liability)

 

This type insurance is a form of liability insurance which helps protect professional advice- and service-providing individuals and companies from bearing the full cost of defending against a negligence claim made by a client, and damages awarded in such a civil lawsuit.Professional liability insurance is required by law in some areas for certain kinds of professional practice. The coverage focuses on failure to perform on the part of, financial loss caused by, and error or omission in the service or product sold by the policyholder. These are causes for legal action that would not be covered by a more general liability insurance policy which addresses more direct forms of harm. Professional liability insurance may take on different forms and names depending on the profession, especially medical and legal, and is sometimes required under contract by other businesses that are the beneficiaries of the advice or service.

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Coverage can provide for the defense costs even when a legal action turns out to be groundless. Coverage does not include criminal prosecution, or a wide range of potential liabilities under civil law that are not in the policy, but which may be subject to other forms of insurance.