What does professional liability insurance provide protection against?

Professional liability insurance primarily offers protection against claims of negligence or misconduct that arise from the professional services provided by individuals or businesses. This type of insurance is essential for professionals such as doctors, lawyers, accountants, and consultants, as it covers legal costs and settlements related to lawsuits claiming that the professional failed to perform their duties competently, leading to client losses or damages.

This insurance is tailored to address issues such as errors and omissions, which are specific to the services rendered rather than the physical assets or property owned by the business. Consequently, it does not cover theft of physical assets, natural disasters affecting business operations, or claims related to employees, which fall outside the scope of professional liability. Each of these areas would typically be addressed by different types of insurance, such as property insurance or employment practices liability insurance.