What Professional Liability Insurance Does Cover and What Does It Not Cover


You may have heard that professional liability insurance covers errors and omissions. However, what does it not cover? Here are a few examples of situations where you won’t be covered: fraud, intentional acts, property damage, and professional negligence. If you’re a real estate agent, it’s important to understand what professional liability insurance covers and what it doesn’t. If you don’t, you could find yourself in a situation where you were accused of professional negligence.

Professional liability insurance covers errors and omissions

If you’re in the professional services industry, you need to consider taking out errors and omissions insurance. In fact, almost every company in this industry does. While the likelihood of physical harm from a lawsuit is small, the financial costs of defending yourself in a court of law is high. Likewise, mishandling a court proceeding can result in a large fine. Errors and omissions insurance can protect you from these costs by covering your legal fees.

However, professional liability insurance is not designed to cover intentional or fraudulent acts. The mistake must be honest. For example, painting the wrong color house will not qualify as an error. Nor would claiming that you won a contract using fake credentials. Also, if the mistake happened in the past, the policy may not cover the lapsed costs. If you have been in business for more than a few years, professional liability insurance may be an ideal solution.

It does not cover fraud

One policy exclusion is the coverage for fraudulent activity. A recent court case held that the insurer did not cover fraud, despite its exclusion. Nevertheless, it covered several other types of fraudulent activity. An insurer would not have to cover fraud if its services were construed as professional services. It would only have to provide indemnity coverage if it were directly related to a lawyer’s profession. Moreover, it would not have to pay out if the insured committed extortionate threats.

There are a number of ways to cover these types of activities, depending on the type of insurance you have. If you are in the financial industry, your insurance may cover a variety of issues related to fraud. The policy also covers computer fraud and employee dishonesty. If your company deals with foreign clients, it can pay off their ransom if their money goes missing. Your insurance coverage also pays for time and money related costs for investigating and resolving fraudulent activities.

It does not cover intentional acts

There are several ways to overcome the exclusion from professional liability insurance that covers intentional acts. For example, the insurer may argue that the insured did not intend to cause harm, but the intentional act still falls within the definition of an accident. However, the insurer may deny coverage if the insured did intend to cause harm. In some states, the intentional act exclusion may not apply. Regardless, intentional acts are often excluded from coverage.

While intentional acts are not covered by the standard of care exclusion in professional liability policies, there are some additional protections. Professional liability insurance policies may include extended reporting periods, which means they will respond to claims filed between 30 and 60 days after the expiration of the policy. This coverage may require an additional premium. Intentional acts are also excluded from professional liability insurance, so it is important to know which exclusions apply to your policy.

It does not cover property damage

Professional liability insurance protects you from lawsuits by ensuring that you’re compensated for legal expenses incurred in the defense of a lawsuit. These policies are typically designed to indemnify you against claims that result from acts or omissions you committed while carrying out your professional services. However, they do not cover property damage and do not cover criminal prosecution. It’s important to read the fine print of your policy before you sign on the dotted line.

If you’re a professional, you should consider purchasing professional liability insurance. It’s a necessity for any business and is a necessity for ensuring that your business remains viable. However, professional liability insurance is not sufficient coverage for property damage. You should make sure that you choose a commercial package policy that includes this exclusion. This way, you’ll know exactly what your coverage is and avoid paying for something you don’t need.

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