What Does Professional Liability Insurance NOT Cover?

Professional liability insurance can protect your business if you are faced with a lawsuit over a mistake made on the job, negligence or failure to perform a service. Unfortunately, these work-related mistakes aren’t the only reason professionals could face a lawsuit. A strong risk management strategy for your business may evaluate and cover a variety of risk factors above and beyond what professional liability insurance includes. It is important that you understand these other liability exposures in order to implement sound protection and address any coverage gaps.

Workplace Hazards & Incidents

From workplace fires to stolen patient information, there’s a variety of incidents and accidents that could disrupt operations and are not covered by professional liability insurance.

You will need to make sure unexpected business-related losses are protected, similar to the way a homeowner’s policy protects personal property. It will be in your favor to find a means to repair or replace business property or equipment (often through your commercial property insurance), as well as reimburse lost earnings caused by covered property loss, as this will likely not be covered by a standard professional liability insurance coverage. 

Employment-Related Practices

Businesses may be legally responsible for their employees, even if they aren’t personally involved in the incident that triggers a lawsuit. Sexual harassment, ageism, discrimination, refusal to employ and wrongful termination are all important employment-related allegations that can have serious legal repercussions. And none of these are typically covered by professional liability insurance. They are covered by employment practices liability (EPL) insurance.

Businesses lacking preventative resources, such as a human resource department, training programs and established workplace policies are targets for these types of lawsuits. 

Employee Injuries

Professional liability insurance may cover the accidental injury of patients, but typically not employees. Worker’s compensation is needed to help cover the medical expenses, lost wages, and rehabilitation costs when employees suffer a workplace-related accident or injury, regardless of fault. Both worker’s compensation and professional liability insurance may be required by law in some states.

What Kind of Business do You Have? 

While professional liability insurance can protect you as a professional, it typically won’t protect a private practice entity or partners. A lawsuit against you or your staff could also name your practice, putting your professional assets in jeopardy. Your practice could be found liable for damages, even if the person named in the suit is not.

There’s just no way to predict exactly what your business will face in the future. Thankfully, there are many ways to try to be prepared. By thoroughly understanding what your insurance policies cover and what they don’t you can better identify and rectify those gaps in your coverage that may jeopardize the business. 

While professional liability insurance can be the cornerstone of a solid risk management strategy, it may not be the only policy you’ll need for thorough, strategic protection. Avoiding a malpractice claim isn’t always possible, but there are strategies you can employ that may help lower the risk of an allegation. 

About Bozzuto & Co. Insurance Services, Inc.

Bozzuto & Company Insurance Services has provided business and personal insurance solutions to clients throughout California since its founding in 1981. Our experienced staff understands the unique needs that each person has when insuring their lives and their businesses, and we pride ourselves on our deeply personal customer service. We are happy to help you through every step of the insurance selection process. Contact us today at (800) 400-6394 to learn more about what we can do for you.