Things happen. There are unforeseeable circumstances that can botch even the easiest job in the most capable hands. When that happens, most contractors, consultants, professionals and business owners are more than happy to help cover the cost to the client, to injured parties and so on. That’s why the insurance policy is there.
Professional liability is there to protect specifically against claims of negligence by covering the court costs. These are the cases that we fight not because we don’t want to foot the bill, but because a reputation is on the line, and at the end of the day, all any professional really has to lean on is a trusted name. That is the foundation of success in any field. You can lose your office space, you can lose your clients, you can lose some of your best employees, and you can always rebuild from there. Once your name has been stripped of value, however, there’s not much left to do. Top talent will avoid the association with a negligent employer and clients and customers will jump ship.
These are the cases that you want to fight even at a financial loss. Even if you know that you’re not at fault for a visitor who suffered an injury on your property, it may make more sense to take responsibility than to fight it in court and spend more money in front of the judge than you would have on the doctor bill. The more comprehensive your professional liability policy, the less likely you are to have to do this when your reputation is on the line.
Of course, you can’t always have the case dismissed, so professional liability will cover the costs awarded to the plaintiff in a civil suit should you lose the case, meaning that you will be covered even where general liability coverage does not kick in. However, the real value in the policy is in allowing you to defend yourself against that civil suit in the first place, and, wherever possible, protecting your reputation within your industry.
Medical professionals rely on malpractice insurance for the same reasons, while insurers and lawyers will rely on errors and omissions, or E&O insurance. In any field where a professional mistake can prove incredibly costly or harmful, you will find some form of professional liability insurance being sold.