What Is Professional Liability Insurance And Why You Need It?

Errors And Omissions (E&O) Insurance

E&O insurance is for any service offering professionals ranging from insurance agents, doctors, lawyers, accountants, and investment advisors. Coverage for E&O insurance includes legal and settlement costs due to any lawsuit of errors, omissions, or negligence.

Malpractice Insurance

Malpractice insurance is a form of professional liability insurance that is primarily for healthcare workers and lawyers. As per the term, if a patient sues a healthcare professional because of an incorrect prescription dosage that deteriorated their health all of a sudden, that professional will use malpractice insurance because it covers medical damages, punitive damages along legal costs.

You can buy this policy from a private insurer, the employer, or the risk retention group.

Directors And Officers (D&O) Insurance

Directors and officers insurance is a form of professional liability insurance. It is the management insurance and is for the directors and officers of a company. Because of this, the policy is position-oriented rather than industry-oriented.

The policy covers the directors and officers of a company against lawsuits due to negligence, omissions, or misconduct from various parties such as investors, employees, customers, competitors. What’s more, D&O insurance protects the insured’s personal property as well.

Employment Practices Liability Insurance (EPLI)

Though not really a form of professional liability insurance, you can bundle EPLI coverage into your insurer’s professional liability policy. What does it do? It covers businesses against lawsuits by employees on the grounds of unfair and/or illegal conduct ranging from allegations of sexual harassment, discrimination, wrongful termination, etc.