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The terms "Professional Liability," "Errors & Omissions," & "Malpractice," are used for the most part interchangeably. These refer to liability claims for injury, damage and/or financial loss arising from the performance of a very long and diverse list of professional services or activities. (For certain categories, professional liability insurance may include libel, slander, invasion of privacy, copyright & trademark violation, etc.) Underwriters will normally exclude professional liability claims from ordinary commercial liability insurance policies where they feel there is exposure. A representative sampling of categories with professional liability exposure would include medical/dental professionals, corporate directors & officers, architects & engineers, publishers & broadcasters, attorneys, financial service providers, consultants, travel agents, public officials, employment agents, insurance agents & brokers, real estate agents & brokers, beauticians & barbers, and software and various other designers. The application for professional liability is especially important, because most underwriters attach it to the insurance contract and designate the information a warranty. It is therefore imperative that accurate information be given. Policies typically carry a deductible of from $250 up to $2,500 or more, sometimes applying to all loss costs (including costs of investigating claims, etc.), sometimes applying only to actual paid claims. Certain policies may apply the policy limit to include defense costs, each dollar of such costs reducing your available limit for the payment of claims. Much of professional liability insurance is written on the so-called "Claims Made" policy form. Some policies may also bear a "Retroactive Date," excluding claims arising from any activities or services performed prior to that particular date. Unlike common general liability policies, professional liability insurance may allow you the option of rejecting proposed settlements. The down side is they also will usually make you responsible for all loss payments exceeding the amounts they proposed, when the the final litigation or other eventual outcome becomes known. This type of insurance varies widely and policies must be read very carefully to determine what is covered. Premium determinants also vary widely, but normally rest on the volume of your activity (measured in gross revenue), along with underwriters' assessment of your degree of hazard by business category.
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