Professional Liability Insurance & Why You Need It
First, a quick explanation of what Professional Liability Insurance (PLI) actually is: PLI is also commonly referred to as Malpractice Insurance, Errors and Omissions Insurance, and is typically used to guard businesses and professionals against claims of negligence. Professionals like doctors, dentists, lawyers, and anyone who provides a professional service is at risk of a claim, and should be protected.
- Professionals like dentists, lawyers, and physicians need Professional Liability Insurance because General Liability policies do not offer enough protection.
- Professional Liability Insurance can also be referred to as Medical Malpractice Insurance or Errors and Omissions Insurance, depending on the profession.
- Professional Liability Insurance does not extend to all mistakes.
Negligent Even If Unintentional
Did you know an act can be considered negligent even if it’s not intentional? For example; an error in meeting professional standards, or an accidental omission of important information can both be considered negligent. Even customer misconceptions can lead to baseless lawsuits that require a defense. This where a Massachusetts Professional Liability Insurance policy is needed.
Think of it this way: You are an ice hockey goalie. The pucks flying towards the net are claims of negligence, and your pads are Professional Liability Insurance. Without pads, it’s going to be very painful.
Everyone Needs Professional Protection
In Massachusetts, this category of insurance is specific to the professions it was created to protect. Physicians, officers of corporations, certified public accountants (CPA), attorneys are some of the obvious professions that need PLI coverage, but there are way more. Professional Liability Insurance extends to anyone who provides a professional service to others, like; yoga instructors, hair stylists, business or career counselors, personal trainers, realtors, and wedding planners.
The top three medical malpractice allegations are: 31.8% Failure to diagnose, 26.9% Surgical errors and mistakes, 24.5% Medication errors, and others.
What Does Professional Liability Insurance Cover?
Professional Liability Insurance protects the insured party against loss resulting from any claim of negligence, error or omission, committed in the conduct of the insured’s professional business.
PLI policies are usually created on a claims-made basis – which basically means that insurance will only cover claims made during the policy period. No matter what the profession, Massachusetts Professional Liability Insurance policy typically includes the following coverage:
- Negligence: This includes alleged mistakes in services, or advice provided by your company.
- Legal Costs: A defense is provided regardless of fault.
- Cover for past work: This ensures future, current, and completed past work.
Not Included In Professional Liability Insurance
Unfortunately, PLI coverage does not extend to all mistakes. Criminal prosecution, bodily injury or property damage, work-related injuries or illnesses, data breaches, and the reputational damage because of the mistake, are not covered under Professional Liability Insurance. However, professionals and people who offer a professional service can find insurance to cover most of that list.