Professional Liability 101: What Is It and Who Needs It

Professional Liability 101: What Is It and Who Needs It

Professional liability insurance goes by many names, including errors & omissions and professional indemnity insurance. All of these terms refer to a particular type of liability coverage where companies and individuals offering advice or services are protected from damages that may derive from a civil lawsuit. Professional liability insures what general and product liability policies would fail to cover. For example, professional liability could protect against claims of inaccurate or incomplete advice, misrepresentation, negligence, and more. All claims regarding property damage or personal injury are covered by other forms of insurance.

Who needs professional liability insurance?

As with any form of insurance, professional liability isn’t a panacea for legal issues and only covers professionals from specific kinds of claims. However, despite its limited scope, this is an indispensable form of coverage that can help protect you where other policies can’t. In general, anyone offering advice or services which a client could blame for particular losses should find a reliable provider of professional liability insurance. At the very least, this policy will cover legal costs in the event of a lawsuit. At most, it can help a professional defend their company. Let’s take a look at some specific cases when professional liability would be a crucial addition to your legal protection.

When do you need professional liability?

Creative Content

If you’re in the business of publishing, broadcasting, screening, sharing, or distributing, you might want to consider a particular form of professional liability. In this field, it may be referred to as Media/Broadcast Liability or Production Errors & Omissions. Unfortunately, there’s been a distinguished increase in litigation proceedings and professionals receiving cease and desist orders due to a host of perceived legal issues. Some of these legal complaints revolve around infringing content, content that violates FCC rules, or an individual’s right to publicity or privacy.

As a provider, publisher, or distributor of content, you would be directly liable if any legal action would be taken against the content being shared. Even though you didn’t write or create the content, the legal system views you or your company as a partially responsible entity. Professional liability insurance will help support and protect your company in the event of legal action that falls under this specific purview. For example, if you help to publish a book in which someone falsely assumes an incident of copyright infringement, professional liability insurance will step in and help protect your company.

Technology Based Services

Since technology is such a pervasive element of most businesses, there’s an increased likelihood that companies using technology based services would make claims about how these resources negatively impact their operations. If you’re a provider of technology based services, you might want to consider a hybrid policy that covers web design, content delivery platform design, authoring tools, software programming, and media liability.

Claims in this area typically involve allegations that your services failed and, as a result, a customer suffered unacceptable downtime, loss of market, or was presented with a solution that didn’t deliver as promised in a particular area, such as data aggregation or algorithmic learning. Without proper coverage offered through professional liability insurance, your company would be a sitting duck when it comes to defending against potential client allegations.

Privacy Breach, Network Security, & Intellectual Property

It’s always important to have your insurance policies in unison with your contracts. You’re placing unnecessary risk on you and your company by offering to cover something that isn’t backed up by insurance coverage. For example, if your contracts state that you’re responsible for data breach or securing the private data or intellectual property of clients and their affiliates, you need to ensure that you have insurance to back up these promises. Investing in a professional liability policy or purchasing a stand-alone policy can help you deliver on these contracts and make your customers feel more secure.

In the 21st century, cyber attacks and data breaches are becoming more commonplace and advanced in nature. It’s not a question of if; it’s rather a question of when you or one of your vendors will be breached. A robust professional liability policy can help cover the expense of breach response and forensics while helping to protect your company against fallacious claims.

If you’re looking for professional liability or any other form of coverage, ABI Insurance is your one-stop provider and a proud sponsor of the OMPA Master Summit. Whatever you create, wherever your storytelling takes you, ABI Insurance can help make your creative vision a reality. Call us today at 503-292-1580 for a no-obligation quote!