What type of coverage do you need?

Do you have a home business? Do you give advice as part of your occupational duties? People answering yes to these questions are candidates for professional liability insurance (PLI).

PLI coverage has other names too. These may include personal indemnity insurance (PII) and errors & omissions insurance (E&O).

Why You Need Professional Liability Insurance

Professional services come with risks that may not be physical. This means that those providing various services may have claims filed against them. The incidents giving rise to claims under professional liability insurance might include:

  • Negligence
  • Misrepresentation
  • Violation of good faith and fair dealing
  • Dispensing inaccurate advice

PLI can provide a targeted, specialized approach to professional service risks. Many people get PLI because their general liability insurance only comes into play for bodily injury (such as slip & fall), property damage, personal injury or other generalized types of claims.

How Professional Liability Insurance Works

One important thing to consider when buying a PLI policy is understanding if it is for claims-made or occurrence insurance.

Claims-made insurance is the type most often used for PLI. This means that to keep continuous coverage, a professional must renew on the end date of the policy. Doing this keeps coverage intact for the next insurance year.

Say you take a three-month vacation and plan to go back to work when you return. You cannot stop the policy and then buy a new one when you return. To have uninterrupted coverage, there can be no coverage gaps.

To keep protection when you retire, buy a tail. Tail coverage often protects you from claims after your business insurance policy ends. Claims-made insurance protects you from claims made during the policy term. The tail picks up when your policy term ends and you don’t renew. Most people buy tail insurance when they:

  • Retire
  • Switch carriers
  • Change over to an occurrence form policy

Occurrence form insurance covers incidents based on when a person files a claim. Occurrence form business insurance pays claims based on date. So, claims stemming from acts occurring in the past usually qualify for payment regardless of how long ago the incident happened (subject to state statutes on time to file a lawsuit.) The main benefit of occurrence insurance is that there is often no need to buy a tail. But, occurrence insurance is usually more expensive than claims made insurance policies.

Do you need Perkasie business insurance? Call The Weimer Group at (877) 791-1707 right now! We can help you get a quote on an affordable, comprehensive policy.

Posted 7:03 PM

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