Professional Liability Insurance

Professional Liability Insurance

May 2011

Introduction to Standard Forms

Summary: Virtually any business or firm can become liable for injury to others resulting from a condition on its premises or arising out of its operations-in-progress, products, completed work, etc. Covering those exposures is the purpose of various forms of general liability insurance, as discussed elsewhere in this tab. Persons or organizations that render professional services face an additional liability exposure — their failure to use due care and the degree of skill expected of a person in a particular profession. Insurance for this exposure is known variously, and without complete consistency, as professional liability insurance, malpractice insurance, or errors and omissions liability insurance.This article presents a general introduction to the area of professional liability insurance and the standard coverage forms that are available to insureds. The articles that follow this one discuss the particular coverage forms.Topics covered:Available formsNotable features

Available Forms

A great deal of professional liability insurance is issued through Lloyd’s and other nonstandard forms, a number of which are discussed in the Specialty Lines pages of the Companies and Coverages volume. As for standard forms, Insurance Services Office (ISO) maintains standard coverage parts for the hospital professional, as well as for physicians, surgeons, and dentists professionals. A number of other miscellaneous professional liability coverage forms are also available. Rules and rating procedures are contained within division seven of the commercial lines manual (CLM).

These standard forms include both an occurrence version and claims-made version.

Notable Features

Unlike other liability coverage, professional liability insurance is not restricted to liability for injury caused by an occurrence (i.e., caused by an accident). In many cases, the professional person will do exactly what he or she intends to do, but, for example, a diagnosis will turn out to be faulty and the patient injured as a result. Injury of this type might not be “caused by an occurrence,” and often has been the basis of liability.