If you’re shopping for a professional liability insurance policy, you should know the limits first. While your commercial coverage can protect you from client claims, injuries and product malfunctions, it might not save you from false advertising, patent infringement and several other commercial dangers. Exclusions will almost always apply.
Below, we’re covering five claims your professional liability policy might not cover. If you’re expecting to face them, you might need more coverage.
One: False Advertising
A professional liability policy won’t protect you from false advertising. If a campaign represents your business in a false way, the responsibility is yours. If customers sue because you’ve failed to be honest, you may have to pay expenses out of pocket. Dishonesty is not an insurable trait.
Two: Patent Infringement
In most cases, patent infringement involves another vendor. Thus, your professional liability policy likely can’t protect you from it. Professional liability insurance isn’t designed for these claims. This said, you can get a patent insurance policy. Patent insurance will protect your intellectual property, and it can protect you if you face losses.
Three: Employment Disputes
While professional liability insurance policy will protect you from employee mistakes, it won’t protect you from disputes. Here's an example. If you’re hiring a consultant, your policy will often protect you if they make a mistake when providing services. It won’t, however, protect you if another employee sues you due to age discrimination. Purchase employment practices liability insurance to fill the gap.
Four: Workplace Abuse
General liability insurance policies have come a long way. Even so, modern professional liability insurance doesn’t cover costs arising from workplace abuse. A comprehensive policy can protect you from allegations of abuse, but professional liability insurance can’t offer blanket protection in these cases. Again, an employment practices policy might prove beneficial in these cases.
Five: Intentional Wrongdoing
Intentional wrongdoing—or causing damage to a customer, client or employee on purpose—is excluded from most professional liability policies. If history proves you meant to cause harm to a client, your policy won’t protect you. Harm itself, isn’t so black and white. It can include:
- Habitually missing an important client meeting
- Giving incomplete advice
- Giving professional instructions known to cause fiscal, or physical, damage
- Bodily harm, such as physical or sexual assault. Criminal actions will almost never have protection.
While it might seem like professional liability insurance has a lot of gaps, it doesn’t fail in serving its purpose. A professional liability policy protects you from workplace errors and omissions. If you’ve made an honest mistake, your policy will protect you. By understanding your policy’s boundaries, you can be a better policyholder, business owner and partner. You can call one of our insurance professionals at 800.475.0001 to help you complete and/or verify your coverage.