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Standard commercial general liability insurance does not cover professional liability, so professions like doctors and attorneys carry malpractice insurance to protect against lawsuits.<\/p>\n\n\n\n
Historically, insurance for traditional professionals (lawyers, doctors) was called Professional Liability (PL), while quasi-professionals had E&O policies. However, insurers now often use the terms interchangeably. Both PL and E&O policies cover financial losses incurred by third parties but exclude property damage and, often, bodily injury, with exceptions like medical malpractice insurance.<\/p>\n\n\n\n
Who Needs Coverage?<\/strong> Defense Costs<\/strong>
Beyond doctors and lawyers, many professionals, including those offering advice or creating products, need liability protection. For example, an ice sculptor creating a swan for a wedding may face a lawsuit if a client deems the result unsatisfactory.<\/p>\n\n\n\n
E&O insurance is crucial for covering defense costs, which can bankrupt small businesses even if a claim is ultimately dismissed. In the medical field, defending against frivolous lawsuits can still cost $120,000 on average.<\/p>\n\n\n\n