What is Professional Liability and Why do I Need It?

professional liability insurance Colorado

Your job is based on reputation and you can't afford to make mistakes. As a professional, whether you are a doctor, a lawyer or a contractor, you must be extremely careful, because even the slightest mistake can bring major harm to your clients.

Professional liability insurance covers the liability you have assumed contractually towards the clients/ beneficiaries for the damages caused to them, as a result of certain acts, deeds, committed through your fault (errors, omissions, unintentional mistakes), during and/ or in direct connection with the performance of the professional activity for which you are authorized.

This type of insurance is usually mandatory, imposed by legislation or by professional organizations/associations in order to obtain/ renew the operating license in the respective field.

Risks covered

  • professional civil liability - the compensations requested from the insured by a damaged third party
  • expenses regarding compensation limitation services
  • document restoration expenses

- all of these resulting from culpable acts (error or omission, unintentional violation of professional duties or negligence) committed by the insured while providing a professional service.

Compensation granted

Professional liability insurance coverages:

  • the amounts of money established on the basis of a court decision or amicable settlement
  • defense costs (e.g. court costs and costs of external consultants)
  • expenses with compensation limitation services (fees and/ or costs necessary for the services of an external lawyer or consultant, requested in order to minimize the risk)
  • document restoration expenses

 

Original Post here: What is Professional Liability and Why do I Need It?

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