Businesses that provide certain types of services to clients need more than commercial general liability insurance to protect them from claims of financial harm to others. While general liability insurance protects against a broad range of potential damage, professional services firms need more coverage to protect against lawsuits related to negligence or wrongdoing in work that they do.

What is Professional Liability Insurance?

Certain individuals and companies in Florida that provide professional services to their clients need specialty liability coverage called professional liability insurance, or errors and omissions (E&O) insurance. “Professionals” are considered to be those who have special knowledge or skill in a certain area and who use that skill to provide advice and services to others. 

Traditionally, doctors, lawyers, architects, engineers, and accountants were considered to be “professionals” for insurance purposes. But as lawsuits related to allegedly faulty business services have proliferated, professional liability insurance is becoming equally important for a wide variety of professions. 

Florida Errors and omissions coverage is appropriate for advertising and public relations firms, internet service providers, web hosting companies, IT firms, construction design firms, and many more. In addition, it is not unusual for actuaries, real estate agents, insurance agents, appraisers, mortgage and securities brokers, business consultants, and many other types of professionals to carry professional liability insurance. 

What Does Professional Liability Insurance Cover in Florida?

Professional liability insurance in Florida covers professionals, their partners, their employees, and the partnership or corporation for damage caused by providing or failing to provide professional services. Professional services firms can be sued for providing erroneous advice, making errors in the services they provide, or even if a client loses money due to an act of negligence or an omission on the part of the professional. 

If you are in the position of providing professional advice and services, errors and omissions insurance protects you in cases of actual or alleged errors, loss of client data, negligent oversell, system failure, or making misleading statements. 

Professional liability policies will cover the costs associated with your legal defense if you are sued, as well as any judgments that are rendered against you or settlements that you must pay to the injured party. Most errors and omissions policies in Florida can be customized for your particular area of expertise and the risks you face. 

What Does Professional Liability Insurance Not Cover in Florida?

Professional liability policies and their exclusions will vary depending upon your profession and your insurance carrier. 

It is important to remember that Florida professional liability coverage is designed to protect you from liability claims that are directly related to the provision of professional services and any resulting financial loss for a client. Losses that are covered under some other type of insurance policy (e.g., general liability insurance, Florida automobile insurance, property insurance, or Florida workers’ compensation claims) are not covered by professional liability insurance. 

Professional liability policies usually exclude coverage for criminal, fraudulent or malicious acts, bodily injury or property damage (except in the case of medical malpractice), and punitive damages. Other exclusions may apply depending on your profession and your policy. 

E&O insurance is for liability claims directly related to the provision of professional services, and the resulting financial loss for a client or customer. Remember that losses related to other areas of your business or other liability claims will not be covered by professional liability insurance. This is where your general liability coverage or other types of business insurance will come into play. 

What Are the Benefits of Professional Liability Insurance?

If you have a professional liability policy, it benefits you by offering coverage for:

• Defense costs
• Alleged or actual negligence
• Actions of temporary staff and independent contractors
• Claims arising from services in the past (if your policy allows)
• Financial damages
• Personal injury claims (libel and slander)
• Copyright infringement
• Global coverage (check specifics with your insurance company)

In addition, local or state licensing boards or Federal laws may require some professionals to have professional liability insurance. 

Any business that provides a professional service or regularly gives advice to clients should at least consider professional liability insurance. 

Can I Afford Professional Liability Insurance in Florida?

The cost of professional liability insurance depends on a variety of risk factors that are unique to your business, including: 

• Your industry: The higher the risk for your industry, the higher your premiums will be. Consider the risks faced by an accountant versus a large advertising agency. 
• Your coverage limits: Limits vary by policies and can be anywhere from $250,000 to $2 million dollars. Higher premiums result from higher coverage limits. 
• The location of your business: If you’re located in an area with a high claims rate, you may pay more for coverage.
• The number of employees you have: The more employees you have, the higher your risk for a professional liability claim. Your premiums may go up accordingly. 
• Your experience: Experienced business owners may pay less for professional liability insurance than new businesses. 
• Your claims history: If you have a history of professional liability claims, your professional liability insurance premiums will likely be higher. 

Do I Need an Agent to Purchase Professional Liability Insurance in Florida? 

Professional liability insurance is very complex and requires the help of an insurance professional with specialized knowledge and experience. A Florida independent insurance agent can make sure your professional liability insurance policy is tailored to the risks you face, and can examine your entire business insurance program to recommend top-quality, comprehensive coverage. 

You will need to work closely with your insurance agent to make sure your policy fits your needs.