4/C - Professional Liability Flashcards
What Does it Cover?
Professional Liability Insurance covers lawsuit and/or settlement costs when a claim is made because of alleged wrongful acts.
Malpractice
Two Types
- Medical Professional Liability
- Lawyers’ Professional Liability
Both cover claims of act or omission if professional service differs from accepted standard.
Medical Professional Liability Protects:
- doctors
- nurses, nurse practitioners
- veterinarians
- hospitals and clinics
Lawyers’ Professional Liability protects:
- lawyers
- paralegals
- legal professionals
Errors and Omissions Insurance
- Protects the insured from consequences of failure to perform
- Excludes coverage for libel, slander, punitive damages
- Protects persons and organizations
- Can cover an employer’s losses from suits for sexual harassment, wrongful termination, discrimination, etc.
Exclusions to Errors and Omissions
- Bodily injury
- Property damage
- Fraudulent or criminal acts
The Claims Made Policy
- covers claims made during policy period
- does not cover a claim filed after policy period expires
- can apply retroactive dates to policy period
The Occurrence Policy
- covers liability for occurrences happening during policy period
- covers after term expires if occurrence was during policy period
A Unique Provision: “Consent to Settle”
The Consent to Settle clause protects the insure if the insured does not approve a recommended settlement.
- The insurer pays expenses up to the date the insured refuses, but is not required to continue lawsuit expenses afterward
- Defense costs are included in policy limits.
Other Specialty Liability Coverages
- Directors and Officers
- Fiduciary
- Employment Practices
- Cyber
- Liquor
Directors and Officers Liability
Available to:
- Private companies
- Educational institutions
- Non-profit organizations
- Corporate officials
Pays for:
- Legal defense
- Damages awarded in lawsuits
Why buy it?
- Protects board members’ personal assets (otherwise at risk of loss in a liability claim)
- Helps attract top-notch employees for director/officer positions
Excludes:
- Criminal/fraudulent acts
Fiduciary Liability
ERISA (Employee Retirement Income Security Act) defines:
Fiduciary: Any business or person with authority over an employee benefit plan
Employee Benefit Plan: A plan, fund, or program that provides income for employees apart from their regular income
Fiduciary has responsibility to handle all Employee Benefit Plan funds with expert knowledge and care.
Fiduciary Liability coverage protects fiduciary from:
- Mistakes in handling funds
- Omissions in communicating plan information to employees
Employment Practices Liability Insurance (EPLI)
Provides legal defense for businesses and pays for damages awarded in court when employees claim violations such as:
- sexual harassment
- wrongful termination
- privacy violation
- discrimination
- emotional distresss
- breach of contract
- wrongful discipline
- failure to employ or promote
Excludes:
- punitive damages
- criminal fines
Cyber Liability
Cyber and Privacy Insurance
- Provides coverage for losses in the event of a data breach
- Can be written to include costs related to privacy breach, such as:
- consumer notification and credit monitoring services
- business interruption costs
- electronic update costs
- expenses from cyber extortion or cyber terrorism
- expenses from an employee’s intentional breach of information
Liquor Liability
Dram Shop:
- Bar
- Tavern
- Any business selling alcoholic beverages
Can be held responsible for a patron’s drunken mistakes
Liquor Liability covers cost of alcohol-related:
- Bodily injury
- Property damage
Includes protection for losses related to serving minors.
