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Professional Liability Insurance

Professional Liability Insurance covers you and your company if you make a mistake (error) or fail to do something (omission) while conducting professional services. This policy is also often referred to as Errors and Omissions Liability Insurance or Malpractice Insurance. If your business offers professional services (such as engineers, architects, lawyers) or performs any procedure directly on a person (such as tattoo artists, barber, doctors, dentists), then you should have Professional Liability Insurance. This policy will provide coverage for financial loss due to claims against yourself, your employees and your corporation alleging negligence or failure to perform your professional duties properly. Read on to learn what our Professional Liability Insurance offers.
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Who Should Buy Professional Liability Insurance

Every day, your clients or patients rely on your advice and expertise.  Should you make a mistake while providing advice or performing a procedure and that error results in damages or a financial loss, you can be held liable and may be sued.

Professional Liability Insurance provides coverage for individuals and businesses offering professional services. If you work in an industry that provides services or advice to individuals based on your specific credentials—such as your education, experience or professional designation—then you should have Professional Liability Insurance.

Also known as Errors and Omissions Insurance, this policy covers damages that are not insured by a General Liability Insurance policy. General Liability covers physical risks—like bodily injury or property damage—but it does not cover claims arising from professional services.  However, General Liability does not cover bodily injury as a result of services performed directly on a person such as injury sustained while undergoing surgery or getting hair cut.

Contrarily, Professional Liability Insurance picks up these "gaps" in a general liability policy in order to cover risks related to errors and omissions in the services you or your business provide.  This can include those financial losses that do not result in bodily injury or property damage such as costs related to project delays, losses of income or costs to re-design or re-build something where there was a design error.  In case of malpractice, professional liability can pick up costs related to claims of negligence due to injuries sustained while undergoing a procedure such as cutting hair, tattooing or laser aesthetics.

Professional Liability Insurance policies will vary based on your industry and needs.  At Krywolt Insurance, we customize your Errors and Omissions Insurance coverage for the specific requirements of your business.

Professional Liability Insurance Coverage Options

Professional Liability Insurance is a must if you or your company provides a service which includes physical contact with your customer or if you provide advice to your clients. If your company is sued, your Krywolt Professional Liability Insurance may include some or all of the following:

  • Alleged or actual negligence
  • Defense costs
  • Personal injury
  • Copyright infringement
  • Worldwide errors and omissions insurance coverage
  • Temporary staff and independent contractors
  • Claims arising from services provided in the past
  • Claims and damages

Alleged or Actual Negligence

Errors and Omissions Insurance coverage is strongly recommended to protect your business from claims alleging negligence from your professional services. These claims may include:

  • Failing in your duty of care: Duty of care is a legal duty to take reasonable care to not bring harm—physical, mental or emotional—to others through your actions or inaction. For example, a teacher has a reasonable duty of care to students under his supervision. Likewise, a taxi driver has a reasonable duty of care for her passengers, other road users and pedestrians.
  • Giving incorrect advice: Giving incorrect advice that causes your client damages can be grounds for a suit. For instance, if a financial planner gave a client incorrect investment advice that caused a financial loss, or if a lawyer gave a client incorrect legal advice that resulted in loss of property during a divorce settlement.
  • Making mistakes: While most professionals pride themselves on their expertise, mistakes do happen. Depending on the industry, these mistakes can have serious consequences. For example, if a tattoo artist makes a mistake while inking a customer and the customer has to pay to have the tattoo removed, this could result in a suit.

Defense Costs

Your Errors and Omissions Liability Insurance will cover the costs associated with lawyers to defend you—even if the lawsuit is groundless. Unfortunately, even if the suit against you holds no weight in court, legal proceedings are expensive and you or your company could incur a serious financial loss undergoing legal proceedings. A Professional Liability Insurance policy will help cover you from this financial deficit.

Legal costs that may be covered by your Errors and Omissions Liability Insurance could include:

  • Lawyer’s fees
  • Administrative expenses
  • Court fees
  • Expert Witnesses
  • Settlement costs
  • Mediation expenses
  • Court judgements

Your Errors and Omissions Liability Insurance policy may even cover supplemental expenses you incur as a result of attending an arbitration proceeding trial in the defense of a covered claim.

Personal Injury

Errors and Omissions Liability Insurance may protect you against personal injury claims that arise while rendering your professional services. For example, your policy may protect you from alleged defamation including: 

  • Claims of libel: Libel is an untrue defamatory statement that has been made in writing. For instance, if a journalist or biographer made the mistake of writing unverified facts that end up being untrue—and that the subject feels negatively impacts his or her good name—it could result in a lawsuit.
  • Claims of slander: Slander is an untrue defamatory statement that is spoken orally. For example, if a lawyer on a public case insinuates untrue information during a press conference, the client may have grounds for a suit. Likewise, if a reporter asks a defamatory question during an interview on T.V., he or she may also be in legal trouble.

Copyright Infringement

Error and Omissions Liability Insurance may also protect against copyright infringement. This coverage is particularly helpful for individuals working in the fields of media, marketing or technology. Should an individual or a company wrongfully use the work of another person, this can infringe on the copyright of that work.

For example, if a magazine uses the work of a photographer without permission this infringes on the copyright of the photo. Likewise, selling/distributing or posting work online without the owner’s permission could result in a suit.

Worldwide Errors and Omissions Insurance Coverage

At Krywolt Insurance, we believe your insurance should follow you wherever your business takes you. Perhaps you work as a consultant and your expertise is hired by companies across the globe. Or, maybe you’re a freelancer with multiple clients all over the world. It’s best practice to have all your bases covered and ensure your Professional Liability Insurance policy covers you no matter where you are providing your professional services.

Temporary Staff and Independent Contractors

As a business owner, you hire employees to provide the professional services offered by your company. Krywolt covers claims arising from business-related services completed by your employees, temporary staff and independent contractors*. While you may not be personally at fault for a claim of negligence or error, one of your staff members may have made a mistake. This mistake could be the responsibility of your company.  *It should be noted that an independent contractor will need their own insurance to cover their exposure.  While your company is covered the independent contractor will not be included in the coverage definition under your policy.

For instance, an architecture firm may have a number of senior, mid-level and junior architects, project managers and administrative staff in its employ. It may also hire independent construction and interior design contractors to help out with a job, and may need to hire temporary architects or administrative staff if a full-time employee is on leave. If a mistake was made during construction—like delays in construction or faulty cost estimates—the responsibility is on the firm, not the contractors or employees.

Claims Arising from Services Provided in the Past

Did you know there is no statute of limitations for claims, permitting there is new information that has just come to light? For instance, a construction company may have renovated a roof four years ago. However, if it only comes to light now that the wood used was not treated and has resulted in rot that requires additional repair costs, the construction company could face legal trouble.

If you’ve been practicing as a professional service provider for a long time, then you may have made a mistake in the past that may not be realized until weeks, months or years down the road. It’s better to be on the safe side with an Error and Omissions Liability Insurance policy.

Claims and Damages

If you lose a large claim, it can affect the financial stability of your business. Rather than have to face the potentially devastating financial impact of losing a negligent, error or omission claim against you, your Krywolt policy can cover claims for monetary damages and non-monetary relief.

It’s better to be safe than sorry. Avoid having your consulting agency, law firm or tattoo shop crippled because you lost a claim against you.

With Krywolt Insurance in your corner, you don’t have to worry about incurring losses from a suit against you due to error, negligence or omission. Our insurance companies will look to defend you and, if necessary, appoint a lawyer to handle your claim. Additionally, a Professional Liability Insurance policy can cover any damages you may incur (up to the policy limit).

Get a fast, free quote now or call us at 403-475-5434 to get started today—and feel confident knowing Krywolt Insurance is behind your business.

Frequently Asked Questions

Who Needs Professional Liability Insurance/Do I Need Professional Liability Insurance?

You need to have Professional Liability Insurance if you:

  • Provide services or advice based on your education, experience and/or professional designation.
  • Are physically touching or conducting operations on a person, such as a barber or doctor.
  • Have any exposure to a claim for damages that do not result from property damage or bodily injury. For instance, claims seeking compensation for loss of income, project delays, trademark infringement or other financial losses not related to property damage or bodily injury.

For example, some industries that should consider having Professional Liability Insurance include:

  • IT and computer contractors
  • Engineering contractors
  • Construction contractors
  • Architects
  • Consultants
  • New media
  • Social services
  • Finance professionals
  • Legal professionals
  • Photographers
  • Writers
  • Medical workers
  • Forensic experts
  • Psychologists and counsellors

What is a Professional Liability Carrier?

A professional liability carrier is an insurance company licensed to sell professional liability insurance. Typically, a professional liability carrier is not licensed to discuss and conduct business directly with the public. However, they have contracts with multiple insurance brokers who complete applications and review coverage needs that are submitted to the carrier for review.

The professional liability carrier would then decide whether or not to provide insurance based on the information provided. The professional liability carrier also decides the cost of insurance and sets the terms and conditions.

Is Professional Liability the Same as General Liability?

No, Professional Liability Insurance is not the same as General Liability Insurance. However, the two policies can work together to cover different risks. 

General Liability Insurance is meant to cover bodily injury and property damage as a result of your operations. General Liability excludes claims arising from professional services—this is called the "professional services exclusion."

Contrarily, a Professional Liability policy will not cover bodily injury or property damage except in the case of injury during a procedure. The policy typically extends to all other financial losses related to the rendering of a professional service.

What is Not Covered by Professional Liability Insurance?

Professional Liability Insurance may have any number of specific exclusions included in its wording. Typically, a Professional Liability policy will not cover losses related to property damage or bodily injury—unless those damages result directly from the failure or error in rendering a professional service. 

An example of a claim not covered by a Professional Liability Insurance policy would be bodily injury due to a slip and fall in a doctor’s office. However, bodily injury sustained because of a doctor making a mistake during a surgery would be covered under a Professional Liability Insurance policy.

What is the Difference Between E&O and Professional Liability Insurance?

Professional Liability Insurance, Errors and Omission Liability Insurance and Malpractice Insurance all refer to the same type of insurance. Each term describes insurance meant to cover financial losses incurred by a client or patient as a result of:

  • A failure to complete a professional service correctly (error).
  • A failure to complete a service that should have been rendered or give advice that should have presented (omission).

These different terms for Professional Liability Insurance can be interchanged and often are used to indicate different industries. For example, insurance professionals may use:

  • Errors and Omission Liability Insurance to describe a business giving advice or doing design work, such as engineers, architects or IT professionals. 
  • Professional Liability Insurance to describe professionals with services that are not driven by advice, like tattoo artists or barbers.
  • Malpractice Insurance to indicate the medical or legal industry.

What is the Best Professional Liability Insurance?

The best Professional Liability Insurance is a policy that covers operations specifically related to your service and/or business. In fact, the operations disclosed on a Professional Liability Insurance application will directly affect how the policy will best cover you. 

Additionally, the best Professional Liability Insurance policy is one where the application has been fully completed and describes in detail your full operations and how they may cause a financial loss to someone else.

How Much Does Professional Liability Insurance Cost? 

Professional Liability Insurance costs can be less than $1000 per year, depending on the business operations and volume of annual revenue. Costs for Professional Liability Insurance for a high-risk business or a large volume business can be in excess of $50,000 per year.

What's the Average Cost of Professional Liability Insurance?

The average cost of a Professional Liability Insurance policy for a small business is around $1500 per year. The cost of an Errors and Omission Liability Insurance policy varies based on the industry and business operation.

Where Can I Get Professional Liability Insurance?

Professional Liability Insurance can be found by contacting a licensed insurance broker that specializes in business insurance—and that specifically specializes in Professional Liability Insurance. 

While any licensed insurance broker can sell Professional Liability Insurance, you should consult with a broker that has the knowledge and expertise to present your application to multiple insurance carriers. This will ensure you receive multiple quotes and coverage options. Krywolt Insurance Brokers specializes in Professional Liability Insurance.

Do Some Clients Require You to Carry Professional Liability Insurance Coverage?

Increasingly, clients and contracts require Professional Liability Insurance. When providing a professional service to a client, it’s common for the client to require Professional Liability Insurance—especially if there’s a risk of financial loss from the service being provided.

For example, oil and gas contracts often require Professional Liability Insurance for drilling consultants, engineers and other occupations. Likewise, IT contracts also often require evidence of Professional Liability Insurance before any work can be completed on a large network or computer system. 

When is Professional Liability Insurance Important?

Professional Liability Insurance is important when business operations involve any form of professional service or advice. It’s important to have Professional Liability Insurance if your services include the potential to make a mistake that could result in a financial loss for your client.

It’s also important to have Professional Liability Insurance if you’re performing services directly on a person or animal that may result in injury. This would include barbers, tattoo artists, surgeons or veterinarians.

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You need an insurance expert that understands Professional Liability Insurance to be able to define all the possible risks associated with your business so you get the best possible coverage to ensure that a single simple accident or oversight doesn’t overcome your business. You know your business, we know the risks and the ways to protect your business from potentially crippling law suits or loss.

We don’t offer instant online quotes for Professional Liability Insurance because there is no way we can get to know you and your business without speaking to you and coming to understand all the complexities or simple processes that need to be insured.
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