From the Front Lines: Professional Liability

Why professional liability?

There are a lot fewer people in the insurance industry who want to focus on these coverages. Some people would say they’re more demanding and that there’s more detail and moving parts in professional liability than there would be in, say, workers’ compensation. I like the fact that you have to know a little bit more.

Biggest challenges in professional liability?

Staying on top of the changes related to court cases and legislative developments. For instance, there have been new rules passed for financial advisers, who now have to take greater care in handling their clients’ money. The implication is if you’re an adviser, maybe you want to look at increased limits of liability insurance because there might be a greater propensity to have litigation against you.

What do you say to first-time professional liability client?

I try to explain it. The first step is distinguishing between the coverages needed. Then, it’s understanding what they’re doing and how they’re doing it, because with either professional liability or errors & omissions liability, the policy is very exact about what it covers. If they have a claim from an area not included in that description, it’s not going to be covered.

Professional liability advice for a fellow agent?

This is very detailed, meticulous insurance. It’s neither better nor worse in terms of an insurance product that’s more basic, but it may require a little more attention to detail than basic coverage like general liability or workers’ compensation. If you want to specialize in this area, you’ve got to be willing to immerse yourself in a lot of detail.

Favorite professional liability success story?

In the mind of the buyer, it may be something they’re required to have because of a contractual provision. Nobody thinks they’re going to have a claim, so if you know you have put coverage in place and that it has performed, that always gives you a particular degree of satisfaction. I’ve had several instances that have played out that way. And on a personal level on behalf of our organization, if we’ve helped a client deflect something that would otherwise cause financial pain, there’s a sense of accomplishment.

Future of professional liability?

It’s going to be more in demand. As a country, we understand one of our basic rights is to sue anybody at any time for any reason. Even if you’re innocent, you still have to defend yourself, which can be very costly in terms of legal fees. I think the future involves more litigation, closer underwriting and increasing premiums.