If your client list includes business consultants, public relations firms, credit bureaus, advertising agencies, marketing firms, or travel agents, they have now become more vulnerable than ever to claims alleging negligence arising from their professional services and any resulting economic losses sustained by the people who hire them. As a broker, you should understand the unique duties of each of these professional service providers, and help them to tailor coverage to best fit each type of risk.
The definition of “standard of care” has made a target of these types of fee-based professionals, and they could greatly benefit from a misc professionals program geared to provide them with coverage for any errors or omissions, as well as claims of negligence stemming from the services that they provide. Miscellaneous professional liability insurance provides some much-needed protection against any potential legal action taken by their clients and other third parties.
Protection provided by this policy
A professional liability policy responds to claims or suits arising out of any actual or alleged negligent act, misstatement or misleading statement committed in rendering or failing to render professional services to others for a fee. Limits of liability should include claim expenses incurred in connection with a claim or suit filed against an insured. Policies are most commonly written on a claims-made and reported basis.
It has become common practice for those operating in these lines of work to be required to carry professional liability insurance by their own clients. These types of companies may also engage in contracts in which they accept the responsibility for any liability issues if such liability arises out of their actions.
Remember that a lawsuit can be brought by any third party who is impacted by these service providers, and not only by their immediate clients, so the broader their exposure, the greater their need for insurance protection. A large proportion of lawsuits today tend to be meritless, but there will still be the need to defend against any such accusations. They’ll need the experience and expertise of an attorney, and defense expenses typically make up a significant amount of the costs associated with professional liability lawsuits. Having coverage through a misc professionals program can even be the deciding factor when your client is competing against other firms to win a service contract.