Is providing professional services your line of work? Here’s why it is so important to have Professional Liability insurance.
All professionals are exposed to civil actions against them, arising from or deriving of the services they provide. The consequences of these events are unpredictable and can be potentially devastating for any professional and their company. The importance of having a Professional Liability insurance policy grows every day due to the high costs involved in responding to any situation.
Professional Liability insurance policies are necessary for any business providing a professional service, including doctors, architects, accountants, lawyers, and contractors, among others. The purpose of this policy is to respond to possible damages or injuries that, due to possible negligence, error, or omission, and in an involuntary manner, a professional may cause to third parties while exercising their profession. Similarly, the policy provide coverage for legal defense costs associated with claims or lawsuits, even when on some occasions the alleged acts have no merit.
It is common for professionals and companies to obtain a General Liability Policy. However, one should keep in mind that this type of insurance does not cover a risk deriving from the legal exercise of their profession.
In addition to being a protection for you as a professional, this insurance gives people who contract your services (or patients, if you are a doctor) the confidence of having the support provided by its coverage.
Types of Professional Liability policies
The two types of policies currently available on the market are:
- Policy with occurrence-based coverage, which responds to claims that may arise only during the period in which the policy is active.
- Policy with claims coverage, known as “Claims Made” and is the most popular. It covers claims for acts committed after the established retroactivity date. This date generally corresponds to the moment the policy is initially acquired. Therefore, it is essential that coverage is not interrupted when renewing the policy. The latter is a condition to maintain the established retroactivity date.
Each policy has specific conditions you should consider before acquiring it. Make sure the coverage limits are appropriate for the type of service you offer.
For guidance on which policy is right for you and your business, please contact Popular Risk Services. Call us at 787-731-6900, Monday through Friday from 8:00 a.m. to 5:00 p.m.
Popular Risk Services, LLC is an Insurance Producer duly authorized by the Office of the Insurance Commissioner to manage life, disability, miscellaneous, title, health, and variable insurance business in Puerto Rico. Insurance products are not insured by the FDIC or other government agencies. They are not deposits or obligations of, nor are they guaranteed by, Banco Popular de Puerto Rico or its subsidiaries or affiliates. Some insurance policies may lose value. Popular Risk Services, LLC is a subsidiary of Popular, Inc. and an affiliate of Banco Popular.
This article is for informational purposes only and does not constitute an endorsement or guarantee of accuracy or applicability for any particular purpose. Neither Popular nor any of its affiliates, subsidiaries, or related companies shall be liable for any special, direct, or indirect harm stemming from the information contained in this article. Should you require further information or guidance on the subject of this article, you should always seek the advice of a competent professional of your choice.