Business & Commercial Insurance
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Business & Commercial Insurance Information
Professional Liability Insurance
As the name indicates, Professional Liability Insurance (or E&O Insurance) covers an individual or entity as a result of losses incurred by one of their customers due to an error or inadvertent omission of fact. In layman's terms, it protects the professional or service-providing business owner from bearing the entire burden of defending themselves against a lawsuit bought by a client as a result of negligence. The crux of Professional Liability lawsuits rest on "failure to perform" a given duty under a contract.
Some of the industries who benefit from Professional Liability Insurance include:
Construction (General & Artisan Contractors)
Here's an example of where Professional Liability Insurance can prove to be beneficial to a business owner:
Let's assume a software engineer were contracted to write a program to perform a specific task for a customer and the program fails once delivered. If the contract grantor suffered a loss as a result of this "failure to perform", they could seek damages under the insured's Professional Liability Insurance policy.
Most Professional Liability Insurance policies cover losses on a "claims-made" basis. Essentially that means the policy will only cover losses that are reported during the period in which the policy is in force. Retroactive coverage extending benefits over a prior period can be purchased for an additional premium.
This coverage is VITAL for anyone in a professional service oriented industry. To receive a FREE quote on coverage for your entity, call (703) 674-0299.