At ENPICA, we are frequently asked about Professional Liability Insurance and why it is important. In this FAQ we will share some of the more common questions we receive and provide the answers necessary to make a determination about the value of this often misunderstood protection.
FAQ What is Professional Liability Insurance?
Sometimes called Errors and Omissions, this type of coverage addresses the liability we have with respect to members, clients and customers and the services and programming you as an organization provide. It will protect an organization for issues arising from professional acts, advice or consultation. Examples include testing mistakes, improper action on a medical release, interpretation of bylaws, counseling errors and numerous situations a non-profit can face.
FAQ My organization is protected by our national organization/department of education/group affiliation? Why would I need this?
Never assume someone else will assume your liability. We see everyday where an organization is left in the cold when an issue arises. While 90% of claims are the result of injuries or property damage, 35% of dollars paid can be attributed to Professional Liability and employment practice issues.
FAQ We have a General Liability Policy – won’t this cover any issues we might have?
No – General Liability policies usually cover bodily injury and property damage claims, not claims against an organization, employee or volunteer for a mistake made when providing business services or advice.
FAQ Isn’t Professional Liability the same as Directors and Officers Insurance?
Directors and Officers (D&O) Insurance provides protection to insureds who serve on a board of directors or as an officer of a corporation. Essentially, this type of insurance is for those who are in a managerial position and responsible for making major financial decisions or signing contracts.
FAQ Is Professional Liability Insurance expensive?
No – when weighed against the cost of a lawsuit and paying out of pocket for legal fees and damages, the cost of Professional Liability Insurance is much less expensive. Legal fees alone can cost thousands of dollars and are no guarantee of a positive outcome. In a world where lawsuits are commonplace, insurance is a necessity.