Professional liability insurance, also known as errors and omissions insurance or malpractice insurance, is important for professionals who provide services to clients. It helps protect against financial loss resulting from errors or omissions made in the course of providing those services.
For example, a lawyer may make a mistake in a legal case that results in financial loss for their client. Without professional liability insurance, the lawyer would be personally liable for those losses. With professional liability insurance, the insurance company would cover the costs of the claim, up to the policy limits.
Professional liability insurance is particularly important for professionals who work in high-risk fields, such as healthcare, legal, and financial services. It can help protect against financial ruin and allow professionals to continue practicing their profession without fear of personal financial liability.