There are a couple of different coverage types of professional liability insurance, based on what you do and provide to customers or clients.
- Malpractice insurance is coverage that’s specifically designed for medical professionals such as psychiatrists, podiatrists, and gynecologists. It protects against lawsuits that allege negligence or mistakes. If you work in the healthcare industry, malpractice insurance should be the first policy you obtain.
- Errors and omissions liability insurance is also known as E&O insurance is coverage that’s designed for those who provide advice or services such as lawyers, consultants, insurance agents, and architects. It protects against lawsuits that claim a financial loss occurred based on bad information or negligent advice.
A lawsuit in the professional industry is not unheard of and in fact very common. There are two kinds of professional liability policy coverage types:
- A claims-made policy must be in effect both when the lawsuit is filed and when the incident in the suit took place. This type of policy is the most common, and is usually less expensive.
- An occurrence policy covers any incident that takes place during the coverage period, even if the actual lawsuit is filed after the policy expiration. This type of policy provides more comprehensive coverage and is higher priced.