Professional liability insurance (PLI)(commonly known as errors & omissions (E&O) in the US) is a type of liability insurance that helps protect service-providing and professional advice-individuals and companies from encuring the full cost of defending against a negligence claim made by a customer and damages incurred in such a civil lawsuit. The coverage is founded on financial loss caused by and an omission or error in the product or service sold by the policy holder. These are direct precursors for legal action that would not be under the coverage of a more general liability insurance policy which focuses on more direct forms of harm. Professional liability coverage can sometimes also provide the costs for defense, including when legal action turns out to be baseless. Criminal prosecution is not included in coverage, nor a wide spectrum of potential liabilities under civil law that are not listed in the policy, but which may be subject to other insurance forms. PLI is required by law in certain areas for certain types of professional practice (especially medical and legal), and sometimes is required under contract by other companies that are the beneficiaries of the service or advice.
PLI can assume different names and forms depending on the profession. For instance, with respect to medical professions it is known as malpractice insurance, while errors and omissions (E&O) insurance is utilized by consultants,brokers,insurance agents and lawyers.Other professions that commonly buy professional liability insurance include engineering,accountant and financial services,construction and maintenance and transport. Some nonprofits/NGO and other charities are also professional-liability insured.
The main reason for professional liability coverage is that a typical general laibility insurance policy will only attend to property damage, a bodily injury, personal injury or advertising injury claim. Other types of insurance cover public, product liability and employer. But various products and professional services can give birth to legal claims without causing any of the specific kinds of harm covered by such policies. General claims that PLI covers are misrepresentation,negligence and violation of fair dealing and good faith, and inaccurate advice. Examples:
- If a software product does not operate as it is supposed to, it may not cause personal, physical or advertising damages, thus the general liability policy would not be initiated; it may, however, directly cause financial losses which could potentially be associated to the software developer's misrepresentation of the capabilities of his/her product.
- If a custom-designed product fails without necessarily causing damage to property or person other than to the subject product itself, a product liability policy may cover resulting damages such as losses from halting the business, but will generally not cover the cost to repair, redesign or replace the failed product itself. Professional liability policy may cover Claims for these losses against the manufacturer.
What's home health care?
Home health care is a wide spectrum of health care services that you can receive at home for an illness or injury. Home health care is usually less expensive, more suitable than and is as effective as care you receive at a skilled nursing facility (SNF) or at a hospital.
Some examples of skilled home health services include:
- Patient and caregiver education
- Wound care surgical wound or for pressure sores
- nutrition or Intravenous therapy
- Monitoring unstable health status and serious illness
What should I expect from my home health care?
- Doctor’s orders are necessary to start care. Once your doctor refers you for home health services, the home health agency will arrange an appointment and come to your home to ask you some questions about your health and talk to you about your needs.
- It’s important that home health staff see you as frequently as the doctor recommends.
- The home health agency staff will keep the Doctor updated about your progress and also talk to your doctor about your care.
Professional liability insurance provides you with legal representation if you are ever sued and can support a portion or all of the costs of the suit if you settle or lose. Because home healthcare companies can directly influence their customers' health, it will be wise to invest in insurance that keeps your business on top when you are caught up by legal issues.
How Coverage Works
When you buy liability insurance, the insurer will assess your liability risks and sometimes, may require that you take certain precautions to reduce your risks. Your insurer may also exclude certain types of liability, especially if you've been sued before. If you are sued, your insurance company will cover the expenses for a lawyer, which can aid you save money on the costs of paying for the services of an attorney. Your insurer will cover costs of the lawsuit after you have paid your deductible and up to the policy's limitations.
Protection from professional malpractice
If you render any kind of medical care in your home healthcare business, malpractice is a serious offense. A doctor could make a prescription to which the patient is allergic or a nurse might administer an inappropriate injection. Malpractice suits can rapidly costs hundreds of thousands of dollars or even more if a patient is killed or seriously injured. Some home health insurance plans place malpractice insurance into professional liability coverage, reducing your exposure.
The Risks of Negligence
Negligence is any unwise action that leads to injuries. For instance, a home health aide who prepares a meal but does not cook the meat fully could be sued for negligence if her patient develops a food-borne disease. No employee is perfect, but a small omission could cost you to lose your business or thousands of dollars. Liability insurance protects you against these claims.
Some insurance companies provide extra coverage for common issues home health companies face, such as claims of rape or molestation, damage and theft to a client's property. Sometimes you may be required to take certain measures such as carrying out employee background checks, but if these claims are covered by your insurer, your financial vulnerability can be reduced greatly.