What is professional liability insurance?

To protect yourself against this, it’s best to purchase professional liability insurance. But what exactly does this insurance cover? And what should you look for when choosing the right policy?

Who should have professional liability insurance?

Anyone who owns their own business can purchase professional liability insurance. It doesn’t matter what kind of business you have. However, this type of insurance is primarily purchased by self-employed individuals and small and medium-sized businesses.

Difference Between Professional Liability Insurance and General Liability Insurance

Please note that professional liability insurance differs in scope from general liability insurance (GLI). The difference between the two is that GLI covers bodily injury or property damage to a third party. Professional liability insurance, on the other hand, covers only financial loss or property damage.

What does professional liability insurance cover?

Professional liability insurance covers damages resulting from professional errors. Examples include giving incorrect legal advice or making a mistake on a construction drawing as an architect.

What is not covered?

Personal injury and property damage are never covered under professional liability insurance. These are covered only under general liability insurance. If you knock over a stack of bricks and they break in half, that damage is not covered. If you order a number of bricks and provide the wrong measurements, that is covered by your professional liability insurance.

Did you intentionally cause financial damage? If so, you will, of course, never be compensated. Intentional acts are generally not covered by any type of insurance.

If you are held liable as a director, supervisory board member, or regulator, many insurers will not cover the damages.

Was the damage caused by, for example, fraud, such as deception? In that case, it will of course never be covered. This also applies to damage caused by theft and forgery.

Damages resulting from a failure to achieve agreed-upon goals or results are also not covered by your insurance. This includes, for example, exceeding agreements made regarding project costs or duration.

What should you keep in mind when you want to purchase professional liability insurance?

Are you interested in purchasing professional liability insurance? If so, be sure to carefully consider the following points.

Do I need professional liability insurance?

Be sure to carefully consider the industry in which you work. This insurance is worth considering if you primarily provide advice to clients. If you only have an operational role, this insurance is probably not necessary. That said, it goes without saying that it’s better to be insured than not.

Policy terms

Carefully review the policy terms and conditions of different insurers. One insurer may offer more coverage than another. It’s a good idea to check this so you don’t run into any surprises later on.How good is my insurer?

How quickly does your insurer pay out? Is there often a lot of red tape involved before they pay out? Are the policy terms too strict? What is the claims process like? And how good is the customer service? Find out the answers to these kinds of questions before you decide where to purchase your insurance.

Need professional liability insurance? Alpina is here to help!

Take out your professional liability insurance quickly and easily with Alpina today. You can request a quote with no obligation or calculate your premium yourself. You’ll always have a 14-day cooling-off period. Do you have questions about calculating your premium or taking out your insurance? Feel free to contact our customer service team.