Everything You Need To Know About Professional Liability Insurance Policy

Although the term might confuse you, professional liability insurance is a type of insurance that protects professionals, including lawyers, accountants, and physicians against professional risks and related legal expenses.

The features and benefits of opting for this policy are:

1. Cover: This policy includes all legal liabilities that arise out of omissions, negligence, or errors during the policy period.
2. Group policies: Group policies are available for professional indemnity cover. This also provides a certain amount of discount on the premium.
3. Defense expenses: Any kind of defense expense is part of this policy. Limited to India, all the fees and charges applicable in regard to the defense of the insured is paid out of the insured amount.
4. Eligibility: Eligible for professionals who are part of medical establishments, architects, interior designers, lawyers, advocates, engineers, accountants, management consultants, etc.

Depending on the profession, the name of this insurance can differ. It is a speciality coverage not provided under homeowners’ endorsement, business owner’s policies, or even in-home business owners’ policies but only covers claims made during the said policy period.Professional liability insurance is generally on a claim-made basis. This means coverage is only good for claims made under the policy period. Most of them offer indemnity to the insured against any losses arising from claims made by reason of covered error, negligence, or omission in the conduct of the insured’s business. Though incidents that occur prior to the policy period are not covered, there are policies that include a retroactive date.

Some of the general exclusions that are part of this type of insurance are:

1. Fraud, criminal act or any other violation under the law
2. Insured is/was under the influence of alcohol/drug while providing the service
3. Any condition caused by AIDS
4. Liabilities caused due to personal injuries, including arrest, wrongful detention, defamation, etc.
5. Financial loss borne by the insured
6. War activities and nuclear perils
7. Infringement of copyrights, trade name, patent, trademark or even registered design

Medical malpractice is one of the most common types of professional liability insurance. Medical professionals need this cover as they render service under the large threat of facing lawsuits for providing treatment that is considered to be below the standard of care, leading to injury or death of the patient.Professional liability insurance is essential for individuals who excel in a specific area and are categorized as professionals.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.