How Professional Liability Works in Florida
Errors and Omissions insurance (E&O), a form of professional liability insurance, can protect you and your business against actual or alleged errors and omissions that may occur while providing your professional services. These claims can include giving incorrect advice or omitting a piece of information. No matter how baseless the claims are, they can tie you up in legal fees- which can be paid for by having an E&O policy.
Professional liability insurance helps cover claims of:
- Inaccurate advice
- Breach of contract
- Failure to render services
Most insurance companies write a professional liability insurance policy on a claims-made basis with a retroactive date.
The retroactive date means you're covered for incidents that happen on or after a specified date. You want to make sure that when shopping for your E&O policy, you maintain that same retroactive date if you move to a new carrier.
Being on a claims-made policy form means your insurance company only covers claims made against your business during your policy period or within any extended reporting that has been added on. And the claim must be from a covered error or omission that happened after the retroactive date listed on the policy.
Is There a Difference Between Professional Liability and Errors and Omissions Insurance?
The short answer is no. Different industries use different terms for the same type of coverage. Here is how you may see it depending on the industry:
- Malpractice - Doctors
- Errors & Omissions (E&O) - Attorneys, CPAs, Consultants, Insurance Agents, Realtors, Architects & Engineers
- Director and Officers (D&O) - Board members of homeowner or condo associations, of non-profits, or directors of publicly traded companies
Professional Liability FAQ
Just like any claim arising out of your professional services is excluded from your General Liability policy, there are certain exclusions on Professional Liability policies as well, such as:
- Injury on-premises
- Intentional wrongful acts
- Work-related injuries/illnesses to your employees
- Data breaches
The cost can vary greatly in South Florida. No two businesses are the same, and each has different exposures. Insurance companies use different factors to determine policy costs, such as:
- Your policy details, like your retroactive date
- The limits you chose/are required to have
- How many years of experience you have
- Nature of your business
You should consider professional liability insurance coverage if your business:
- Provides a professional service
- Gives advice to clients
- Is requested by a client to meet contract requirements
- Designs / pulls permits
- Provides medical services
- IT solutions