Your professional liability insurance policy is intended to provide coverage for claims against you relevant to the delivery of your professional services. Generally, these claims fall under the legal area of negligence. Negligence in providing legal services, or negligence in the omission to deliver legal services.
In order for a client to prove negligence, there are 4 specific criteria that must be met:
– There must be a duty of care owed
– There must be a breach of that duty
– There must be financial damages incurred
– The financial damages must be a result of the breach of duty
So, what other exposures does your professional practice have that may not be covered by your professional liability policy?
Here are 5 potential claims which may not be covered by your professional liability policy:
Property Damage / Personal Injury
Your professional liability policy provides coverage for financial loss in the delivery of your professional services. Damage to a client’s physical property, or personal injury (physical or emotional) are specifically excluded under your most policies. If you have clients visit your office, or have employees who visit your client’s office, you should have a General Liability Insurance (aka – Business Office Package, or BOP) policy for this exposure.
If your employee steals from you, or from your client, it will not be covered under your professional liability policy. Your professional liability policy specifically excludes criminal acts. You will need a Crime Policy or Employee Dishonesty Insurance to insure this exposure. Crime coverage or an employee dishonesty policy provides coverage for theft by your employee. It is important to make sure that any policy you review provides affirmative coverage for your client funds and property. In addition, a crime policy may include coverage for theft by a non-employee.
Acts as Director or Officer
If you act as a Director or Officer for a client, or other entity, your acts in this capacity are not covered under a standard professional liability policy. If you are asked to serve in these capacities, always ensure that the entity maintains Directors & Officers insurance.
Services you provide to an entity which you own, or act as a Director or Officer
If you own any percentage of an entity that you also provide services to, or if you provide services to an entity where you also act as a Director or Officer, it is essential to review your professional liability policy. Most professional liability policies have an exclusion for services provided under these scenarios. The percentage of ownership allowed may vary by policy. In addition, some policies will exclude services to entities in which your spouse has ownership, or acts in an Officer capacity. Read your policy thoroughly to understand your coverage.
Claims by an employee
Unless specified otherwise in the policy, claims made against you by an employee, or third-party, for discrimination, sexual harassment, or related are not covered under your professional liability policy. These claims would be addressed by an Employment Practices Liability policy.
As a business owner there are a lot of different insurance policies that you need to be aware of. It is important to understand what your potential exposures are and make educated choices on your need to purchase insurance.
For additional information or assistance with your professional liability insurance contact us.
This information is for illustrative purposes only. Only the actual policy form and endorsements can provide full information about the coverage, exclusions, and conditions of a policy.