Professional Liability Insurance Key Elements

Professional Liability Insurance protects professionals who have the ability to use their professional knowledge and skills. This person usually has abilities that are above the norm. It is easy to think of professions such as attorneys, doctors and engineers.

All negligent claims in the United States are based on four elements:

  1. A legal obligation owed to someone.
  2. A breach of the duty that was due
  3. Third-party may sustain some type of injury or damage.
  4. Finally, there must be a causal connection between the proximate injury and the legal obligation.

Most professional liability claims result in loss from contractual or advice related liability. The most common standard in professional liability claims is “what’s the usual, customary, and reasonable standard for that profession in this particular locale.” A doctor in Manhattan may have a different standard for professional conduct than one in rural Wyoming. The referring physician is usually exempt from liability for any malpractice that may result from specialist activities. Common claims against doctors include missed diagnoses and non-diagnosis. These are some of the most common malpractice claims against doctors. Malpractice claims can be filed for surgical errors, improper or incorrect use of drugs, chemicals, and treatments.

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Most professional liability insurance covers medical professionals against damages and claims arising out of professional acts or omissions, as well as from the acts and omissions their assistants and other physicians. Most policies written on this basis are not on an occurrence-type policy. A doctor’s malpractice policy can include a clause that allows the doctor to agree to settle the case. This is in contrast to the insurance company making a payment to cover the claim. Professional liability policies should clearly state whether defense costs are included in the policy limits or not. It is clear that having the defense cost beyond the policy limits will provide more coverage than simply combining the limits with the defense cost. Doctors and physicians often have professional liability policies that cover them and their organization. It can be either their private practice or the hospital.

Doctors have a few common defenses they can use in professional liability lawsuits. The statute of limitations is one such defense. Depending on what type of claim, there may be a defense that a statute of limitations has expired. Many states have contributory negligence laws that would exonerate the doctor if they contributed in any way to the claim. Nearly all surgeries require informed consent and an assumption form of risk. This may reduce or eliminate risk for the doctor. Many states have Good Samaritan statutes that allow doctors to avoid professional liability if they are performing medical services without payment, such as an emergency.

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Final, the negligent claim requires all four elements to be present. It means there must exist a legal duty, as well as a breach of it, that results in injury or damages that were caused by the doctor.