Professional Liability Insurance in Vermont
What is Professional Liability Insurance?
Professional liability insurance helps to cover your Vermont business‘s expenses when a lawsuit is filed against you.
Losses can occur in a variety of ways, including physical and financial. Bad professional advice can lead to a client losing their retirement savings, their health, or even their life. When this type of situation occurs, you can be sued by your client as they try to recoup their losses. For you, it means lost time at work, court costs, and defense fees, even if you are ultimately found not liable. If you are found liable, you may have tens of thousands - or even millions – to pay in damages.
Who Can Benefit From Professional Liability Insurance?
Many industries are considered to provide professional services. Any of these can be eligible to obtain professional liability coverage to protect their business. Professional services are those jobs in which you are compensated for providing opinions, advice, or care, such as:
- Accountants
- Lawyers
- Healthcare professionals, such as doctors and dentists
- Insurance agents
- Real estate agents
- Architects
- Engineers
- Software and IT professions
Types of Professional Liability Insurance
Because professional liability coverage can cover so many industries, it is typically divided into three separate types of coverage, each tailored to a subset of professional industries.
- Malpractice Insurance helps to provide coverage for doctors and other healthcare professionals for injuries or death caused to patients due to negligence or errors.
- Errors and Omissions Coverage helps to provide coverage to a broad range of non-healthcare professionals.
- Directors and Officers Coverage is designed to help cover executives and high-ranking employees for lawsuits involving hiring and firing practices, financial responsibility, and similar situations.
While each type of policy has its own coverages and exclusions, they all typically cover defense and other legal costs as well as any legal settlements, up to your policy limits. Your insurance agent can help determine what type of policy is right for you as well as how much coverage you need.
Term Limit Extensions of Professional Liability Insurance
Typically, insurance will only cover events that occur while your policy is active. This is also true for professional liability coverage, where the error and claim must both occur during the policy period. This claims-made type of policy is the standard and is often the most affordable type of liability coverage.
However, sometimes it can take weeks, months, or even years for an error to come to light. If a client sues you, and your policy is no longer active, you may not have any coverage at all. Some insurance carriers allow you to purchase term limit extensions that provide coverage even after your policy expires, for a specified period of time. While more expensive than standard coverage, it can be especially helpful for some industries.
Mistakes happen, but if you make an error while providing professional services, you could be liable for thousands, or even millions, of dollars in damages.You can be sued by the injured party, their spouse, children, guardian, or employer. The costs of a lawsuit can easily cripple your business. Professional liability insurance helps protect Vermont businesses from these costs.
