What is the primary purpose of a professional liability insurance policy?

The primary purpose of a professional liability insurance policy is to protect against lawsuits for professional negligence. This type of insurance is specifically designed for individuals and businesses that provide professional services, such as doctors, lawyers, accountants, and consultants. It covers legal costs and any settlements or judgments that may arise from claims of errors or omissions in the professional services rendered.

This coverage addresses the unique risks faced by professionals who could potentially be sued for not meeting the standard of care in their field, which could result in financial losses for their clients. Unlike other insurance types, professional liability does not cover physical assets, personal injuries unrelated to professional judgment, or workers' compensation benefits. Instead, it focuses on the financial implications of professional mistakes, which is critical for maintaining the integrity and financial stability of professionals in their respective industries.