Professional Liability Insurance
Coverage When Non-Bodily Injury or Physical Damage Lawsuits Occur
Directors and Officers Liability
While General Liability insurance provides coverage against “slip and fall” for physical damage or bodily injury, it does not cover non-bodily injury or physical damage lawsuits. Directors & Officers insurance (D&O) is designed to defend the directors and officers in the rare case of a lawsuit resulting from their actions. Your directors and officers will have peace of mind knowing that their personal assets are not at risk from the decisions they make while serving your company.
It is common for potential board members to request Directors and Officers Liability insurance as a prerequisite to joining your board. In order to recruit and keep the best and brightest, D&O is quickly becoming a mandatory coverage. Although most lawsuits brought against the board may be thrown out of court, D&O can be looked at as a legal defense fund for your directors, officers, and owners. Board members, officers and business owners will not need to fund the defense on their own.
Employment Practice Liability
The number of employment related lawsuits has steadily increased over the past 10 years. In the event of employment litigation, Employment Practice Liability (EPL) provides essential coverage, protecting your company from the potential costs of defense. For example, an employee is dismissed and sues the company for age discrimination, sexual harassment or wrongful termination. These lawsuits have become more and more common and EPL provides necessary coverage for this type of suit. Even if your human resources department has the best procedures and policies you can still be on the hook for large defense costs.
Professional Liability / Errors and Omissions
Businesses providing professional services (Architects, Surveyors, Accountants, etc.) have potential exposure from unhappy clients that feel that they’ve been harmed by the action or inaction of your business. General Liability covers businesses for bodily injury, physical damage and advertising injury but professionals are exposed to potential suits through inaccurate advice, negligence, misrepresentation or violation of good faith and fair dealing. Professional Liability – Errors & Omissions (E&O) provide coverage for this potential exposure.
The primary reason for obtaining this coverage is to cover the actions of your professional business. If your actions were seen by an unhappy client to cause financial losses, which could potentially be attributed to your company, you could have a large exposure for defending the lawsuit. The cost to defend a lawsuit, even if it gets thrown out of court, is enough to justify purchasing Professional Liability – E&O to your insurance portfolio.