Professional Liability Insurance: The Basics

professional-liability-insurance-homeInsurance coverage is something that every business needs in protecting its assets and protecting it against potential lawsuits. If your business provides professional services such as attorneys, doctors, architects, insurance agents or accountants, then obtaining professional liability insurance or “errors and omissions insurance” is a must for your business.

Professional liability insurance covers wrongful acts, errors or omissions that the insured commits and provides protection against claims that the insured is liable as a result of an error or omission in their professional work. Similarly, errors and omissions insurance provide coverage in the delivery of businesses technical services.

Medical malpractice insurance covers medical professional and medical institutions while legal malpractice insurance covers lawyers and legal firms. Errors and omissions coverage encompasses the other types of professionals including architects, insurance agents, and accountants.

Wrongful Acts

Most professional liability policies provide coverage for “wrongful acts.” A wrongful act is defined as “any actual or alleged breach of duty, neglect, error, misstatement, misleading statement, or omission, committed solely in the performance of duties for the school district.” Amos Ex Rel. Amos v. Campbell, 593 N.W.2d 263 (Minn. App. 1999).


Most professional liability policies are set up to provide coverage for “claims-made” coverage. This means that the policy only cover claims made during the policy period. In other words, “at the expiration of a claims-made policy, coverage available under the policy disappears.” In Re. Silicone Implant Ins. Coverage Litigation, 667 N.W.2d 405, 409-10 (Minn. 2003).

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