Professional Liability Insurance Policy Primer
The need for a professional liability insurance policy for business owners in Maryland is a crucial protection for any business owner. These policies are financial products devised to compensate the insured (your business entity) in the event of a claim being made against it. The policy covers damages sought under claims for errors, omissions, or neglect.
At its most basic, the professional liability insurance policy protects your business against a loss that arises as a result of negligence caused “by your business while in the process of carrying out your business.” This insurance protects businesses that manufacture goods or provide services. Because these policies vary wildly in the type of professional liability they insure for, the amount of coverage provided and the premiums charged fluctuate in wide margins as well.
There are times on which a business owner may need to call upon the coverage in a professional liability insurance policy and they include:
- Charges of negligent acts
- A negligent error
- An act of negligent omission
- Work carried out in a manner that could potentially lead to further issues in the future
- Incorrect or false advice or misleading information
- Accidental encroachment of intellectual property or copyright of another
These policies typically provide coverage for protection against claims of civil liability, claims arising from the loss or damage of documents, and the costs of legal defense that may arise from the case. As with any other business insurance policy, there are items specifically excluded from a professional liability insurance policy; you need to speak with a trusted Maryland business insurance provider to find the coverage that suits your business’s needs and will provide protection to indemnify your business against loss.
As your Maryland business insurance agent will explain, physical property such as outbuildings or contents of the buildings is not covered. The policy doesn’t provide coverage for employer’s liability, either. Be aware that if your company provides warranties as part of its business practice, such as an express or implied guarantee of outcome, this could impact the coverage provided under your policy.
To learn more about how this applies to your business, please contact us.