What is professional liability insurance?
In St. John’s, many professionals provide a service or give advice in a professional capacity. You can be sued by your clients if your service or advice results in financial loss for your client. They could be accusing you of a failure to provide, negligence, misrepresentation, or something else. Whether the accusations are true or false, you’d still be responsible for paying the costs associated with litigation.
Professional liability insurance gives St. John’s professionals peace of mind. Also known as errors and omissions insurance, this covers the legal defense costs in insured events as well as settlement or judgement awards, up to your policy limit.
At EasyCover, we offer three levels of coverage:
- $1 million
- $2 million
- $5 million
Each option is the maximum amount your policy will pay out over the 12-month period, regardless of the number of claims you make. The level of coverage you should choose will depend on your industry, your clients, the value of your projects, and the anticipated costs of litigation in the event you’re sued. In some professions, this coverage is required by law. Many contracts also require a certain level of professional liability insurance in St. John’s.
You’ll also be responsible for paying a deductible for each claim you make. For example, if your deductible is $500 and you make two covered claims, you’d pay $1000 total. Your professional liability insurance would cover the rest (up to your policy limit), so long as it was an insured scenario.
Keep in mind that this coverage won’t cover criminal acts and doesn’t take the place of commercial liability insurance – bodily injury and property damage for third parties isn’t covered by errors and omissions coverage. If you participate in any deliberate dishonesty, fraud or misrepresentation, you will not be covered. You’re also expected to report any incidents that may result in a lawsuit to your insurer. This won’t affect your coverage or premiums, it is just important to have open communication.
For example, let’s say you’re a website designer in St. John’s. You deliver an e-commerce website and your client launches it. Unfortunately, there’s an issue with the purchase process and no one can buy anything. Once you’re aware of the mistake, you should contact your insurance company to give them a heads up. While this may not result in a lawsuit, your insurance company wants to be prepared in case it does.