Who is Covered Under a Professional Liability Policy?
Professional liability insurance helps cover you and your company if you make a mistake in your professional services. This coverage is also known as errors and omissions insurance (E&O). The insurance company will pay all amounts in excess of the deductible up to the limit of liability that the Named Insured becomes legally obligated to pay because of a claim as a result of a wrongful act in the performance of your professional services*.
Even if you didn’t do anything wrong, your client can still sue your business if they believe you made a mistake. Without coverage, you’ll have to pay expensive legal defense costs out of pocket. It’s important to remember that professional liability insurance doesn’t cover everything, or everyone.
Who is considered a Named Insured? On most standard Professional Liability policies, the persons below could be included in the coverage:
- a Named Insured listed on the policy
- a newly acquired subsidiary
- any person who is or becomes a partner, officer, director, member, stockholder or employee of the Named Insured or newly acquired subsidiary during the policy term, but only while acting within the scope of their duties for the Named Insured or newly acquired subsidiary
- any person who is or becomes a leased or contracted personnel under the direct control and supervision of the Named Insured or newly acquired subsidiary during the policy term, but only while acting within the scope of their duties for the Named Insured or newly acquired subsidiary
- a retired partner, officer, director, member, stockholder or employee of the Named Insured or newly acquired subsidiary, but only for professional services or activities performed for or on behalf of, at the request of, and for the benefit of the Named Insured or newly acquired subsidiary
Please contact your agent at Professional Underwriters to discuss coverage for persons on your policy.
*policy requirements must be met, claim payments are not guaranteed.