IPA Risk Management,LLC
Professional liability insurance is one form of protection for professionals and for their clients. Coverage will shield personal assets and will help maintain a good reputation through the defense of allegations of wrongdoing which might be frivolous or false. For the client who has suffered some damages through the actions of a professional, liability insurance will ensure that there are adequate funds available to make amends for the wrong that has been done. A professional liability policy covers errors, omissions or negligent acts which may arise from the normal or usual duties carried out by the insured. When the professional is an employee of a firm, the firm, as the employer, is responsible for the actions of the employee. However, a court of law may find a professional personally responsible for an incident that occurred due to an error, omission or negligent act committed by the professional as an individual. To date, we know of no such situation ever occurring, however, it is our opinion that given the behavior of the courts in recent times, one may be made personally accountable.

In another scenario, the employed professional may offer a professional opinion or offer professional services on his or her own time. In this case, the professional would be personally responsible for any consequence of these actions. It is highly probable that the policy of the employer does not provide coverage for the liability exposures of the moonlighter. Should the limits of the employer's insurance be insufficient to meet the settlement of a claim in which the professional was co-defendant, the personal assets of the professional could be at risk. The difference in limits between the employer's insurance policy and the professional's policy is available to cover any shortfalls in these instances. A professional liability policy offers the insured peace of mind by knowing that he or she has independent coverage and by knowing what limits of that coverage are available.
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