Costs and Coverage Written by JULIA KAGAN and last revised on September 3, 2022, and reviewed by Margaret James What Is Professional Liability Insurance?
Professionals like doctors, lawyers, and accountants are covered by professional liability insurance (PLI) in the event of a client’s negligence or other claim.
Because general liability insurance policies do not protect against claims for negligence, malpractice, mistakes, or misrepresentation, experts in a particular field need this kind of insurance.
Important Takeaways: Businesses use professional liability insurance to defend themselves against claims of negligence.
This insurance is used by professionals who contract with them, such as doctors, architects, information technology specialists, and accountants.
A lot less than hiring a lawyer, paying court costs, and other related costs, PLI costs between $500 and $1,000 annually.
How Professional Liability Insurance Works Professional liability insurance may go by a variety of names, such as medical malpractice insurance for doctors or errors and omissions insurance for real estate agents, depending on the industry. In-home business policies, business owners’ policies, and homeowners’ endorsements do not cover professional liability insurance.
Most professional liability insurance policies cover only claims that are made and events that take place while the policy is in effect.
You might also come across occurrence policies, which guarantee that you will be protected in the event of an incident that occurs while you have coverage—even if you let your policy lapse and a client files a claim against you after it has expired. Nevertheless, occurrence policies are uncommon.
