You’ve spent years honing your skills, attaining professional education, and you’re so good at something that people are willing to pay you for your advice. That’s great! Until one day one of your biggest customers comes along and says, “you missed something really important. We’re going to take you to court because we’ve just suffered a million-dollar loss.” Hi I’m Jeff Gordon, of Gordon Atlantic Insurance.
What is Professional Liability Insurance?
We’re going to talk for a moment about professional liability insurance. Professional liability insurance comes under different names. You’ve heard of medical malpractice and legal malpractice. In the risk insurance business we call it errors and omissions. We make an error or we have an omission.
What If Your Advice Goes Wrong?
Sometimes people like to come back to us when something goes wrong. Similarly, in many professions, your product or your service is your advice. If your advice goes wrong somewhere, then people may sue you.
How To Insure Against Complaints Going to Court
So professional liability insurance is the answer to that problem. Professional liability insurance for some businesses can be very expensive and very complicated. And others not so complicated. Our recommendation is simply to talk to a professional about your needs because there are many features of professional liability.
What If I Want To Argue My Case In Court?
One example: a hammer clause. What’s a hammer clause? A hammer clause is a feature of a professional liability policy that allows the policy holder, you, to say, “I’ll take my chances over a certain amount of money because I really want to take this to court and have my story told in front of a jury.”
Insurance After the Fact
Another area in professional liability is when you are winding down your practice. Let’s say a year ago something happened, but you only find out about it you decide to retire or to sell your business and move on. Tail coverage provides a continued measure of protection, just in case something that’s already happened that we don’t know about is bubbling up somewhere out there.
Many Types of Coverage
So those are some of the means of coverage in professional liability insurance. There are many others. The best thing for professional liability insurance is to talk to a professional that can help guide you and to have a program that works best for your profession
About Geoff Gordon
Geoff Gordon has been the owner/president of the Gordon Atlantic Insurance agency since 1987. Gordon Atlantic Insurance provides commercial and personal insurance to businesses and families throughout Massachusetts.
A prolific writer and recognized industry thought leader, Geoff has contributed articles to Banker & Tradesman, a regional trade periodical, and served on the Quincy Patriot Ledger’s Board of Economic Advisors column. He is a member of the Plymouth Rock Assurance Agents Advisory Council as well as the Bunker Hill Insurance Agents Advisory Council. Geoff has presented to the Financial Planning Association’s (FPA) education series and teaches locally. Most recently Geoff spoke to a TEDx conference on “Personal Risk for a Rich Life” in February 2016.
Geoff obtained his Certified Financial Planner (CFP®) designation in 1985, the Certified Insurance Counselor (CIC) in 1995, and his Certified Risk Manager (CRM) designation in 2004, and serves as an Asssociate Faculty member of the Institute of Insurance Education and Reasearch, a national credentialling organization.