Miscellaneous Professional Liability is a type of insurance designed for all businesses that specialize in some type of service to the general public. That is, when a company sets itself above the lay population by claiming to know some type of information that sets them apart from others. When a company or individual “provides a service for others” there can be mistakes, errors or omissions, - that is what this insurance is designed to cover.
A professional can make a mistake, misstate information, use information improperly or be guilty of malpractice just like any other person. When a professional acts accordingly, they can be sued.
In a litigious society such as ours, nobody can escape litigation for either a legitimate or perceived mistake. Such actions often turn into allegations on the part of the general public.
Who needs this protection?:
• Financial consultants
• Providers of technology services or a human resources administrator
• Anyone who is compensated for the services they provide
Nowadays, typically lawsuits are in excess of $1,000,000. And a multi-million dollar lawsuit can virtually bankrupt a company, or damage its finances dramatically, even if an award isn’t rendered in a court of law. We are finding that defense costs can be more expensive than actual settlement amounts.
We recommend that anyone who signs a contract with their clients purchase this important protection.
If you do decide to purchase this insurance, here are some important provisos to look for:
• World-wide coverage;
• Duty To Defend wording;
• Inclusion of services performed via the Internet;
• Claim definition to include written demands for non-monetary relief;
• The inclusion of Punitive Damages where permitted by law;
• Broad definition of the word “Insured” to include any subsidiaries, spouse, heirs, domestic partner, etc;
• Coverage for Personal Injury;
• Defense costs in addition to the limit of liability wherever possible.
Please, we urge you not to try to decipher policy terms and conditions on your own. We recommend that you leave it to an independent insurance representative who is well versed in policy language and how coverage applies to your individual needs.
If you are a professional, don’t wait until you need the coverage. Get it now because it will offer you peace of mind and hope that you never have to use it!
- Karen Skoler, CPCU