Question

You should be able to explain the role of professional liability insurance as a means of protecting both providers and patients and describe some of the causes of disruption in the professional liability insurance market and some of the alternative means of self-insurance.

Given the goals but also the problems that arise with professional liability insurance, do you believe that every practicing physician should be covered by medical malpractice insurance or do you believe coverage should be optional?

Answer 1

Ans) Professional liability insurance, more commonly known as errors and omissions (E&O insurance), is a special type of coverage that protects your company against claims that a professional service you provided caused your client to suffer financial harm due to mistakes on your part (errors).

The main purpose of professional liability coverage is to go beyond general liability insurance, which typically covers property damage, personal injury and bodily injury. Additionally, this professional liability insurance may also cover defense and legal costs, whether the legal claims have grounds or not.

- Rates in the professional liability market are coming under increased pressure as a use of capacity by competing insurers was causing disruption in some of the bigger markets.

- Overcapacity is the biggest threat to insurers in the short and long term.

- Common claims that professional liability insurance covers are negligence, misrepresentation, violation of good faith and fair dealing, and inaccurate advice. Some policies could also cover privacy violations.

- Coverage does not include criminal prosecution, and there is a wide range of potential liabilities under civil laws that may not be covered unless written explicitly into the professional liability insurance policy.