Professional Liability

Professional Liability Insurance (PLI), also known as Errors and Omissions (E&O) insurance, is a type of coverage designed to protect businesses and professionals against claims arising from mistakes, negligence, or inadequate work. This insurance is particularly important for businesses that provide professional services or advice, such as consultants, lawyers, architects, accountants, and medical professionals.

Key Features

• Coverage for Errors and Omissions: Protects against claims resulting from errors, omissions, or negligence in the performance of professional services.
• Legal Defense Costs: Covers the cost of legal defense, including attorney fees, court costs, and settlement expenses, even if the claim is groundless.
• Claims-Made Policy: Most PLI policies operate on a claims-made basis, meaning the claim must be made during the policy period for coverage to apply.
• Tail Coverage: Option to purchase extended reporting period coverage, known as "tail coverage," to cover claims made after the policy expires.
• Indemnity Coverage: Provides coverage for the financial losses suffered by a client due to the professional’s mistake or oversight.

Policy Benefits

• Financial Protection: Shields businesses from the potentially high costs of defending against and settling claims of professional negligence, errors, or omissions.
• Client Confidence: Demonstrates to clients that the business is committed to quality and stands behind its work, which can enhance trust and credibility.
• Risk Management: Enhances overall risk management by providing a safety net against specific professional risks that are not covered by general liability insurance.
• Legal Requirement: In some professions and jurisdictions, carrying professional liability insurance is a legal requirement or a condition for obtaining a professional license.
• Contractual Obligation: Many clients and contracts require proof of professional liability insurance before engaging in business, as it reassures them of financial recourse in case of professional mistakes.

Typical Scenarios Covered

• Negligence: Claims that a professional failed to perform their duties to the required standard, resulting in client losses.
• Misrepresentation: Allegations that incorrect or misleading information provided by the professional led to financial harm.
• Breach of Contract: Claims that the professional did not fulfill the terms of a contract, causing losses to the client.
• Errors in Services: Mistakes in the professional services provided, such as errors in calculations, design flaws, or incorrect advice.
• Failure to Deliver: Claims that the professional failed to deliver services as promised or within the agreed timeline.

For More Information

Contact an AEGIS Commercial Insurance Professional at 718-353-3800 to ensure that your business and employees are completely protected.