Professional Liability
Professionals, such as
doctors, lawyers and accountants, along with a growing number of other
occupations, work in fields that need special protection. Pharmacists, architects,
engineers, opticians, beauticians, insurance agents, and various types of
consultants are frequently sued due to the high standard of accountability
under which they operate.
In most instances, a type
of coverage called a general or commercial general liability policy will
protect a business against the damage or injury their actions may cause to
others. However, this type policy is designed to handle loss associated with
fairly generic and low-risk activities. Examples are customers who cut their
hands on a sharp edge of an office's reception desk or a customer who is hurt
when she collides with a clerk who is stocking a shelf. Much more is at stake
with professional activities. Consider several aspects that make professional
liability tougher to insure:
Professional Advice - persons who need professional liability coverage are
those whom the general public depend upon as experts. They provide assistance
with special issues such as personal health, expensive business transactions,
or personal crises. Many of these situations also involve a high-level of
emotion. When something goes wrong, it is much more likely that a client will
pursue "justice" through the courts.
Professional Reputation - Any claim a client makes against a professional
involves that individual's reputation. In many instances, paying a claim bears
the stigma of admitting to a mistake. The professional may suffer from a
lowered status and could face sanctions from related professional associations
or regulatory authorities. Further, many professionals are proud of their
standing and their abilities; admitting being wrong is usually fiercely
resisted.
Higher Defense Costs - Defending against claims of professional error or
incompetence is usually very expensive and time-consuming. Trials will usually
involve expert testimony and technical arguments and the likelihood of
resolving issues quickly (particularly via a settlement) is extremely low.
Identifying A Loss – The timing between when a loss occurs and when a
claim or suit is filed can be a mystery. A professional may find out she's
being sued today for something that happened ten years ago. The potential for a
huge time gap before a loss arises makes professional liability a very
difficult type of business to underwrite and to price.
You have invested a lot in
your business and your profession. It is important to be sure that you take the
steps to deal with the special as well as the routine sources of loss. As
usual, it is always a good idea to discuss your questions and needs with an
insurance professional.
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