Insurance Terms - Professional Liability

DISCLAIMER - The abbreviated outlines of coverage provided in this site are not intended to express any legal opinion as to the nature of insurance coverage. The terms shown on this site provide only the most basic and general description of some common terms used by the insurance industry. Please read your policy for specific details of your coverage. ONLY your policy provides coverage.

Errors & Omissions (E&O) or Professional Insurance

An E&O professional liability policy covers wrongful acts of a "professional" capacity and typically is purchased by "professionals" such as doctors, lawyers, engineers, architects, teachers, social workers, and many other persons who perform services in a professional capacity.

The definition of a professional is broad. Consultants that provide opinions, clergy and counselors, those with educational degrees and specialized field of work can be considered a professional. If you provide an opinion, design or service that holds itself unique from general information or services then you may have an exposure that requires professional liability coverage.

Some claims that would otherwise be covered under a D&O policy must be covered under an E&O policy because they involve acts outside the capacity of the insured as a director or officer, involve acts excluded by the D&O policy because of the "professional" skill nature of the service or decision (e.g., sponsorship or administration of group insurance plans requires Fiduciary Liability Insurance), or are committed by someone not defined as an insured under the D&O policy.

Fiduciary Liability Insurance

Fiduciary liability coverage covers an insured's breach of fiduciary duties, often with regard to pension, savings, profit-sharing, employee benefits, and health plans, including ERISA violations. Organizations that have employees or officers who are responsible for employee benefits have a professional liability for their failure to perform their duties. If someone in your organization is responsible for assuring any of the above items are properly handled, then that person and your organization has an exposure that requires fiduciary liability coverage.