The whole professional liability policy is important to understand, however, there are a few key definitions that your firm should pay attention to.
Your firm will want to know who an insured is under a professional liability policy. Here is an example of an insured definition.
(J) “Insured Person” means:
(1) any person who was, is now, or hereafter becomes principal, partner, officer, director, employee, or principal shareholder of an Insured Entity, but only if such person was performing Professional Services on behalf of an Insured Entity at the time of the alleged Wrongful Act;
(2) any retired partner, principal, officer, director, shareholder, employee, or member of an Insured Entity while acting within the scope of their duties as a consultant for the Insured Entity or any Predecessor Firm; or
(3) any past or present independent contractor or leased employee of an Insured Entity but only while acting within the scope of their duties for the Insured Entity.
Another definition that is important is professional services. Here is an example of that definition.
“Professional Services” means services the Insured performs for others in the practice of an architect, engineer, land surveyor, landscape architect, construction manager, planner, interior designer, scientist, technical consultant, forensic engineer, expert witness or as defined by endorsement to the Policy.
Professional Services includes any of the above services performed pro bono with the knowledge and consent of a Principal Insured.
One more key definition that should be reviewed is what is a claim. The example is below:
Claim means:
1. a demand for money or services;
2. a civil proceeding commenced by service of a complaint or similar pleading; or
3. a written request to toll or waive a statute of limitations relating to a potential civil or
administrative proceeding, against any Insured for a Wrongful Act.
A Claim will be deemed to be made on the earliest date such notice thereof is received by any Principal Insured.
Keep in mind that these definitions will vary with each insurance company, so always review your firm’s policy. If your firm has any questions with regards to policy definitions, please call, or email, your Professional Underwriter agent for assistance.