Malpractice Insurance can go by several different names depending on what Industry you are in. It can also be called Errors & Omissions Insurance or Professional Liability Insurance. All of these are basically the same type of coverage.
What is Malpractice Insurance?
Malpractice Insurance protects professionals who are in occupations that require a high level of training such as Medical, Legal, or Financial Professionals.
These occupations owe their clients a higher “Standard of Care”. Often a mistake in these fields can result in major economic or financial ramifications for their clients.
If your business needs to have Malpractice Insurance there are a number of things that need to be taken into consideration.
Malpractice Insurance should be used in conjunction with a General Liability policy. In many cases, the Professional Liability Policy excludes damages relating to Property Damage and Bodily Injury. In the case of the Medical field there is usually coverage for Bodily Injury.
Most Malpractice Insurance Policies are written on a Claims Made Policy. These Policies are much more restrictive than your normal General Liability Policy. Claims will only be covered if the claim is made during the policy period. If the policy cancels, so does the coverage.
Many times these policies also have the Defense Costs INCLUDED in the policy limits so when determining what limits you need, you have to take into account that the limit is going to be depleted much faster than if it were a normal General Liability Policy.
One area that Malpractice Insurance does not cover is Cyber Related events or privacy issues with clients or patients.There are also no costs relating to any type data breach or regulatory action as a result of non-compliance with HIPAA, HITECH, GLBA, or any other privacy related laws.
Mistakes can happen in a business and in the legal environment in which we operate, a lawsuit is not out of the question for any business. Investing in Insurance to protect your assets is a critical step in ensuring your business is around for the long haul.