The professional liability insurance cover is a policy that is taken by consulting professionals to cater for their liabilities in case of lawsuits or other losses resulting from their clients actions due to alleged professional mistakes. Such mistakes could include omission errors, professional misguidance, negligent acts, and other professional mistakes. The cover will however not protect the individual from criminal acts and intentional misguidance.
The professional liability cover can be given different names, depending on the professional utilizing the cover. For instance, the name errors &omissions insurance is used when referring to the cover brokers, consultants and lawyers. The cover is referred to as malpractice insurance when referring to the similar cover for doctors. Doctors may fall into legal liabilities in cases where they prescribed a medication, which turns out to be harmful to the client. Clients can react by suing the doctor who could incur legal fines. The malpractice policy cover pays any upcoming expenses in relation to a policy.
Financial advisors could take up the professional liability policy to protect them from the risks associated with their profession. They are faced with the risk of omitting important information which could lead to a poor portfolio outcome, leading to losses. Clients may in turn choose to sue them in a court of law for the omission mistake. Money managers and accountants can also take up the cover.
Professional service providers such as web developers and software developers have specific insurance errors and omissions covers that protect their professions.
Insurance policies for professionals function according to the policy wording. Clients could sue the consultant due to an obvious mistake that he/she could have avoided, making the insurance company an obvious loser. However, the insurance company offers policies at different costs according to the wording. Breach of duty covers and negligent act covers could be different depending on the prevailing circumstances. The insurance companies offer policy covers with a certain minimum compensation payment called a deductible. This limit helps prevent manageable claims from reaching the company.