Professional Liability Insurance Provides Legal Defense Costs
Professional liability insurance, sometimes called professional indemnity insurance in the US but more popularly known as professional negligence insurance, is a type of general liability insurance that helps to protect business owners from claims of negligence and mistakes. It can cover a wide range of professional activities undertaken by members of a company or an organization. Claims can arise through a number of different events, including negligence by a member of staff, faulty products or services, or theft or fraud. The insurance can also cover situations where a company has advertised services or products that it does not actually provide.
Professional liability insurance helps to protect employees, client or customers against claims that might arise because of professional errors or negligence. Claims might stem from exposure to health or safety hazards, or poor product or service quality. Claims might also be based on exposure to other dangers such as electrical shock, asbestos poisoning, lead poisoning or computer malfunction. Some claims might result from exposure to alcohol or tobacco smoke, or noise at work which may have resulted in distraction. The insurance can also cover situations where drugs or chemical substances are used improperly.
Claims often result from a breach of contract, such as when a business owner fails to properly disclose important information or makes false claims. Negligence can also result in cases involving products or services that are substandard or dangerous. For example, a dental office that is sued for not following recommended procedures that could have averted dental injuries might not have been insured for professional liability insurance. There are many situations where it makes sense for small businesses to purchase professional liability insurance.
Claims might result from professional liability insurance when professional negligence is demonstrated through a series of actions. Negligence can be demonstrated with a series of actions, including: a breach in contract, advertising or marketing practices that result in harm being inflicted on a customer, a product or service that is substandard, or negligence in other ways that cause harm to a customer. A good example would be if a dental practice puts patient health at risk by failing to clean teeth properly. These actions might result in damages. Professional indemnity insurance protects dental professionals against claims of negligence.
If a claim against a professional is the result of advertising or marketing practices, professional liability insurance will also cover legal defense costs. The amount of insurance coverage that is purchased depends on the value of the claim. Examples of these types of claims include: advertising and marketing claims, medical malpractice claims, product defects and faulty operations, etc. A dental professional can purchase legal defense costs coverage from an insurance provider. Smaller dental practices may consider purchasing non-smoker emergency service coverage instead of legal defense costs coverage in order to lower monthly premiums. This type of insurance coverage does not pay out winnings in a civil suit.
Property managers, real estate brokers, and mortgage brokers all depend on property or real estate related activities for their income. Professional liability insurance offers them protection in situations where they could be held responsible if a tenant sues them due to negligence. Property managers and brokers need this type of insurance because of the large number of day-to-day tasks that must be performed. If one of their employees becomes injured while on the job, they could be sued. It would be difficult for them to defend themselves in court without it.
Real estate agents also depend on clients to pay their property taxes. If an investor develops a property that later becomes unlivable, he or she could be held liable for all the property taxes. A qualified professional liability insurance provides legal defense costs if a client sues him or her for the property taxes. This type of protection also covers attorney fees when a client sues an investment broker or professional for fraud.
Medical malpractice claims are another area in which medical professionals protect themselves. If a doctor performs surgery and accidentally causes death or permanent brain damage to a patient, a wrongful death lawsuit can be filed against the doctor. Lawsuit loans and settlement loans help doctors cover expenses and limitations that occur as a result of malpractice. Legal defense costs can be very high when a lawsuit is brought against a doctor who negligently caused someone to suffer from brain damage. Surgical liability insurance helps to cover these types of cases in advance so a malpractice suit doesn’t have to be a reality.