Professional Liability Insurance Policies

The key differences between a commercial general liability and a professional liability insurance policy concern covered damages, coverage trigger, and covered activities.  Commercial general liability policies cover losses caused by a wide array of events, but only if the loss results in bodily injury, property damage, personal injury, or advertising injury and arising from an occurrence as defined in the policy.

Coverage the policy provides:

• Professional liability policies, on the other hand, provide a much broader scope of coverage (covered damages are not limited to bodily injury and property damage), but for only one general cause—the rendering of, or failure to render, the specified type(s) of professional services.
  
• Professional liability policies are not standardized, so the scope of coverage can vary significantly from one form to the next.

Important points to discuss with your agent:

• Professional liability policies are virtually always written with a claims-made coverage trigger, which means the policy in effect at the time a claim is made must respond to the claim when it is made.
  
• This is in contrast to an occurrence policy, which responds to a claim based on when the loss causing the claim occurred rather than when the claim associated with the loss is made against the insured.

Losses covered:

• The scope of coverage available under the majority of professional liability policies is determined by the policy’s definition of “professional services.”
  

Important Note: Some insurers define this term to include only those services listed in the policy application. The named insured may be further required to warrant that this list is an accurate representation of his exposure. Other insurers specifically list those services that the policy intends to cover. Some insurers provide a broad blanket of coverage for “all of the professional services performed by the named insured.”