Understand Professional Liability Insurance

Overview

Commercial General Liability (CGL) and business owners policies cover many of the liability loss exposures arising from the conduct of a business. However, certain occupations, such as physicians and attorneys, have an additional liability loss exposure: the professional liability exposure, which is not covered under these policies. These individuals need separate professional liability insurance to cover their professional liability risk.

There are also other business-related liability risks that fall under the professional liability category and are not covered under general liability policies. These include directors’ and officers’ liability, fiduciary liability, and employment practices liability. Businesses must purchase separate coverage to cover these exposures. In this course, participants will learn about the most common types of professional liability policies written for specific professions and businesses.

Suitability

This course is suitable for: -

• Underwriters
• Claims teams
• Sales and Business Development teams
• Customer service representatives
• Risk Managers

What is Covered

Day One

Overview of Professional Liability

After completing this module, participants will be able to do the following:-

• Describe the characteristics of a professional
• Explain how changes in public attitudes toward professionals have impacted professionals’ liability exposures
• Describe the purpose of professional liability insurance
• Identify occupations and business-related risks that may be covered under professional liability insurance
• Compare and contrast professional liability exposures and business liability exposures, and explain why a professional needs adequate insurance coverage for both
• Explain how a profession’s standards of conduct and customary practices create legal duties for members of that profession
• Define the privity of contract rule and explain how this rule has been modified to allow third parties to file claims against professionals
• Define the types of damages that may be awarded in a professional liability action
• Describe defenses that may be used against professional liability claims

Common Provisions in Professional Liability Policy

After completing this module, participants will be able to do the following:-

• Explain how to determine which professional services and acts are covered under a policy
• Describe the individuals and businesses that are typically covered under a professional liability policy, and any restrictions that may apply
• Describe the types of damages that are covered
• Identify expenses that are covered as supplementary payments
• Summarize how the following provisions may affect how coverage is provided under a professional liability policy:
  -Defense costs coverage
  -Defense provisions
  -Limits of insurance
  -Deductibles
  -Self-insured retentions
• Explain how a claims-made coverage trigger works, and how it is affected by retroactive dates and extended reporting periods
• Describe the conditions found in typical professional liability policies and how they apply
• Summarize the exclusions found in typical professional liability policies and how they affect coverage

 Insurance Producers

After completing this module, participants will be able to do the following:-

• Explain why insurance producers need errors and omissions coverage
• Explain why insurance producers are considered professionals
• Define the terms fiduciary, agent, and broker
• Describe a producer’s fiduciary duties to insureds and insurance companies
• Discuss the duties an insurance producer owes to insureds and insurance companies
• Describe the types of professional liability claims that may be made against producers by clients and insurance companies
• Summarize the following key features of insurance producer errors and omissions coverage, including how these features differ from other types of professional liability policies:
  -Covered professional services and acts
  -Who is insured
  -Coverage territory
  -Defense costs
  -Supplementary payments
• Describe the exclusions found in typical policies and how they affect coverage
• Summarize other policy provisions and features in insurance producer errors and omissions policies that are typically found in other types of professional liability policies

Architects and Engineers

After completing this module, participants will be able to do the following:-

• Describe the purpose of architects and engineers’ professional liability insurance
• Provide examples of the types of professional liability claims that may be made against architects and engineers
• Describe the types of professional liability loss exposures presented by the architecture and engineering field
• Explain how architects and engineers may use statutes of repose as a defense in professional liability claims
• Summarize the following key features of architects and engineers’ professional liability coverage, including how these features differ from other types of professional liability policies:
  -Retroactive dates
  -Discovery provision
  -Pollution coverage-Punitive damages
  -Who is insured
  -Coverage territory
  -Defense costs and duty to defend
  -Supplementary payments
  -Deductibles and self-insured retentions, including provisions that reduce or eliminate the deductible
  -Cancellation
  -Treatment of other insurance under project policies
• Describe the exclusions found in typical policies and how they affect coverage
• Summarize other policy provisions and features in architects and engineers professional liability policies that are typically found in other types of professional liability policies

Day Two

Lawyers

After completing this module, participants will be able to do the following:-

• Describe the sources used to determine attorneys’ standards of care and duties toward clients and non-client third parties
• Provide examples of errors in litigation and other legal transactions that may result in professional liability claims
• Summarize the following key features of lawyers professional liability coverage, including how these features differ from other types of professional liability policies:-
• Covered professional services and acts
• Automatic coverage for new employees
• Damages that are not covered
• Coverage territory
• Limits of insurance
• Deductibles, including provisions that may reduce the deductible
• Policy cancellation
• Supplementary payments
• Describe the exclusions found in typical policies and how they affect coverage
• Summarize other policy provisions and features in lawyers professional liability policies
  that are typically found in other types of professional liability policies

Physicians (Doctors)

After completing this module, participants will be able to do the following:-

• Describe the standard of care that applies to physicians and the methods that may be used to determine it
• Identify the two areas of law under which most professional liability claims against physicians are made
• Define the following duties owed by physicians:
  -Obtain informed consent
  -Avoid undue familiarity
  -Duty of referral
  -Avoid abandonment
• Explain how the Good Samaritan defense is used in physician professional liability claims
• Describe the types of errors that may result in professional liability claims against physicians
• Summarize the following key features of physicians professional liability coverage, including how these features differ from other types of professional liability policies:
  -Covered professional services and acts
  -Coverage for temporary/substitute physicians
  -Prior acts coverage
  -Discovery provision
  -Coverage territory
  -Policy cancellation
  -Notice of practice changes
• Describe the exclusions found in typical policies and how they affect coverage
• Summarize other policy provisions and features in physicians’ professional liability policies that are typically found in other types of professional liability policies

Directors and Officers

After completing this module, participants will be able to:-

• Explain why businesses need D&O insurance coverage
• Identify the legal duties that apply to directors and officers
• Define the categories of legal actions that may be filed against directors and officers
• Identify business activities that may generate D&O claims
• Summarize the defenses that may be used against D&O claims
• Compare and contrast the coverage provided by Side A, Side B, and Side C of a directors and officers liability policy
• Explain how the allocation condition is used to address claim payments and defense costs when only a portion of a loss is covered under the policy
• Summarize the following key features of directors and officers liability coverage, including how these features differ from other types of professional liability policies:
  -Defense provisions
  -Coverage territory
  -Deductibles
  -Exclusions
• Summarize other policy provisions and features in D&O policies that are typically found in other types of professional liability policies

Employment Practices Liability

After completing this module, learners will be able to do the following:-

• Explain why businesses need employment practices liability insurance
• Describe the types of losses that are covered by employment practices liability insurance
• Explain how third parties might file employment practices claims against a business
• Summarize the following key features of employment practices liability coverage, including how these features differ from other types of professional liability policies:-
  -Covered acts
  -Definition of employee
  -Insurer’s duty to defend
  -Supplementary payments
  -Coverage territory
  -Other insurance
• Describe the exclusions found in typical policies and how they affect coverage
• Summarize other policy provisions and features in EPL policies that are typically found in other types of professional liability policies