As a professional who provides services and advice to your clients, you are vulnerable to legal risks and expenses that could arise from allegations of negligence, errors, omissions, defamation and other potential issues. Even if the allegations are untrue, you could be forced to spend a huge amount of money paying out of pocket for the cost of your legal defence and other related fees. Should you be found liable in court, you could be responsible for eye-watering settlement costs. But with the expertise of the business insurance brokers at Morison Insurance, you can have the insurance protection you need when faced with professional liability claims.
Professional liability insurance offers you protection against financial hardship in the event that you are faced with certain types of allegations and need legal support. Our team of experienced brokers can find the right combination of coverage that will let you rest easy at night knowing you are protected against serious financial loss related to liability allegations when providing professional services.
Ontario professional liability insurance, which is also known as errors and omissions (E&O) insurance or malpractice insurance depending on the type of profession it is being applied to, is a type of business insurance coverage that offers financial protection against costs incurred by defending yourself and your professional service against allegations of professional negligence, inaccurate advice, wrongful business practices, breach of contract, errors or omissions, and conflict of interest.
In the event that you have legal action brought against you for one of the reasons listed above, your professional liability insurance policy would prompt your insurance carrier to provide the necessary funds to cover expenses such as legal mediation, legal defence in court, settlement costs and potentially other related expenses as well, up to the coverage limit listed on your policy. Without this professional insurance coverage, even a simple mistake can lead to immense legal costs and settlement fees. However, with professional liability insurance, Ontario professionals are protected against claims of negligent acts or damages resulting from services or advice they provide.
Ontario policies for professional liability insurance provide protection for people who give professional advice or services, make educated recommendations, design solutions or represent or advocate for the needs of others. Some professionals who may benefit from having this type of coverage in their overall business insurance include:
Please keep in mind that the list above is not exhaustive, so there are other types of professionals who need the protection against financial loss that is afforded by professional liability insurance. Ontario insurance brokers will tell you this is important coverage for anyone who deals with clients who may claim that something done on their behalf was done incorrectly and that this error has caused them a financial loss.
Like most forms of business insurance—with the obvious exception of commercial auto insurance—having professional liability insurance is not legally required by the Ontario government. However, many professionals are subject to professional liability coverage requirements in order to complete their registration with their professional associations, so in a practical sense, it is mandatory insurance coverage for those professions.
For example, optometrists are required by the College of Optometrists of Ontario to hold professional liability insurance that meets specific minimum coverage limits and includes tail insurance. Some types of professionals may or may not be able to access professional liability insurance coverage through their professional association, or they will need to provide proof of insurance to their organization.
Even if they're not required by a professional association to have professional liability insurance, Ontario professionals or businesses that provide design, consulting, advice or advocating services can't afford the risk of going without it. As anyone who has ever been involved in some type of litigation knows, the cost of legal services can easily exceed hundreds of thousands of dollars—and that's before legal settlements are added on to someone who has been found legally liable for professional negligence or other similar allegations. Most people simply don't have the funds available to pay out of pocket for those types of costs, and Ontario professional liability insurance gives the monetary protection necessary to avoid serious financial hardship.
It's easy to think, "I have a great relationship with my clients, so I don't need to worry about professional liability," or "I'll just be really careful and it won't be a problem," but that's simply not a realistic expectation for businesses or professionals to have. Even the most cautious or conscientious person can't prevent every mistake or mishap that could lead to a professional liability claim, and claims can still be made even if you have done nothing wrong. So by having the right coverage for professional liability insurance, Ontario professionals can be protected against financial loss.
In some cases, yes, they can. Many employers or business owners in Ontario, especially larger institutional employers like hospitals or health authorities, have professional liability protection (PLP) in place to provide professional liability insurance coverage for their individual employees. However, as an employee, it is your job to make sure that your employer’s PLP meets any insurance requirements you are obligated to meet. Additionally, if you work for multiple employers, you will need to ensure that you have protection in place to ensure you are covered with professional liability insurance in all of your roles.
To confirm whether your employer’s PLP meets your needed professional liability insurance requirements, request a copy of your PLP coverage or a detailed letter that includes the policy number, name of the insured, coverage details, and policy period from your employer or human resources department, and review it carefully. Compare the details of the policy against the requirements set by your profession’s regulatory board, which can typically be found on their website or in their organizational bylaw. If you have any questions about coverage, contact your regulatory board for further information about your professional liability insurance needs.
Remember, while your employer may provide liability protection, it is ultimately up to you to ensure that any of your professional liability insurance needs are being met. If you have gaps in your coverage, speak with one of our liability insurance brokers about how you can close those gaps.
This is a fairly common misconception for a number of reasons—the names of these two types of insurance coverages sound very similar, they're both types of liability coverage, and commercial general liability insurance is a standard part of most business insurance policies. Those factors lead many people to think that the commercial general liability (CGL) coverage they already have is sufficient to protect them against professional liability insurance claims, but that's not the case.
Commercial general liability policies are an important part of a comprehensive business insurance package that provides financial protection against liability costs that could arise if you or one of your employees is accused of causing third-party property damage or third-party bodily injury. The classic example of the importance of CGL coverage is a customer entering your workplace and sustaining injuries when they slip on a wet floor. In that type of scenario, the customer could choose to sue to recover medical expenses and potentially other costs, such as a loss of income during recovery, and your commercial general liability coverage would apply to the related legal defence and settlement costs.
Professional liability coverage also provides you with funds to handle liability-related costs, but in different types of situations than what is typically covered by commercial general liability. Professional liability insurance in Ontario applies to issues such as:
There are many different types of liability insurance coverage available. In addition to commercial general liability and professional liability insurance, there is also product liability coverage, commercial umbrella or excess liability coverage, and environmental or pollution liability coverage, to name a few. Make sure to speak with your business liability insurance broker about the different types of commercial liability coverage available, and which ones you may benefit from having.
In general, you can expect legal defence costs to be covered by professional liability insurance if the litigation is the result of an insured peril, such as the ones listed above, that are related to professional liability insurance.
Ontario residents should be aware, though, that defence costs are included within the limit of liability on certain professional liability insurance policies. That essentially means that the amount of insurance compensation that may actually be available for a professional liability claim is limited. It's also worth noting that punitive damages are excluded from some policies. It is important to ensure that your specific professional liability insurance coverage fits your unique risk exposures because the way policies are worded can vary significantly.
If you're not sure that you currently have adequate coverage, the best course of action is to contact the reliable insurance brokers at Morison Insurance. We have the experience and training to assess your insurance risk exposures and recommend the best possible coverage so you can sleep easily at night knowing you have the financial protection you need with the right business and professional liability insurance coverage.
Ontario professional liability insurance is an important part of a commercial insurance policy for certain types of professionals. However, it doesn't protect against everything. Here are some of the perils that professional liability insurance coverage simply does not apply to:
A key fact to understand is that professional liability insurance coverage only applies to professional liability scenarios. If you were to make a professional error that only affected your business, your professional liability insurance would not apply because there's no element of liability when you cause harm to yourself or your own business.
It is hard for us to put a price on your business or professional liability insurance coverage without knowing more about you and your business. That’s because a wide range of factors go into calculating the costs of commercial liability coverage. Even if you or another professional run the same type of business offering the same type of services in the same place in Ontario, the costs of your professional liability insurance coverage can still widely differ because of the other factors that impact what you pay for insurance rates.
The amount you can expect to pay for Ontario professional liability insurance will vary quite a bit based on factors such as:
Generally speaking, the average cost of professional liability insurance falls somewhere in the range of $1800 to $3,500 per year. It makes sense that you want to know exactly how much you'll have to pay right now, but we can't give an accurate estimate without knowing more about you and your business. Get in touch with our knowledgeable Morison Insurance brokers and we'll get started on finding the right Ontario professional liability insurance to address your specific risk exposures and ensure you're covered against all the perils you're most likely to encounter.
Different professionals will typically have different professional liability insurance costs, as they will have different risks associated with them that will impact your insurance rates.
For example, if you work in the healthcare field, you will likely have higher than average costs for professional liability insurance. Ontario doctors, nurses, and other health care professionals provide advice on a person's health, and should they provide the wrong advice or health care, they can be held liable for it. The high-risk nature of this service and the potential for malpractice suits costing them millions of dollars means that they face some of the highest rates for professional liability insurance in Ontario. Finance and accounting professionals can also face higher rates, as their mistakes have the potential to cost their clients a lot of money.
On the flip side, some consultants and personal support workers may have lower-than-average professional liability insurance premiums due to the low-risk nature of their work. However, as mentioned above, a wide range of other factors go into calculating the cost of your insurance premiums, so the type of profession or industry you work in alone does not determine how much your professional liability insurance rate is.
Ontario professional liability insurance policies are usually issued on a claims-made basis, meaning that your coverage must be active at the time when the claim is made against you rather than the time when the incident occurred. If an incident happens before you have professional liability insurance coverage, but you have a policy in place at the time you are sued, your coverage will apply to that incident. Conversely, if you have coverage at the time when the incident occurs but not when you are sued, your coverage will not apply.
For example, if you retire and cancel your professional liability insurance coverage but are sued a year or two later for something that happened before you retired, you'll be left without the necessary insurance coverage even though you did have an Ontario professional liability insurance policy in place when the original incident happened.
This is where tail coverage comes in and why it's so important. Tail insurance extends the coverage period of your professional liability insurance so it still applies for a certain period of time after you retire. How long it applies will vary depending on how much tail coverage you have added to your policy, and how long you need to have tail coverage will vary based on your profession and unique risk exposures. It is a very necessary addition to your professional liability policy, as you can still have legal action brought against you years after an incident allegedly occurs. That's also a good reason to maintain continuous coverage throughout your career, not just when you're actively working with clients.
Insurance of any type is a complex topic, and of course, professional liability insurance is no exception. It can be a lot easier to understand when you see some specific examples of professional liability claim examples, such as:
Of course, these are just some of the scenarios Ontario professionals could face regarding professional liability claims throughout the course of their careers. To ensure you have the proper insurance protection in place, speak to your expert broker at Morison Insurance about your business needs.
Ontario professionals can get professional liability coverage from Morison Insurance. If you currently have inadequate coverage or don't have coverage at all, the experienced insurance brokers at Morison Insurance are here to help. We work for our clients, not the insurance companies, which means your best interests are our top priority. Count on our team to thoroughly and thoughtfully assess your insurance needs, then search high and low for the right Ontario professional liability insurance quotes to address your specific insurance requirements.
Give us a call today at 1-800-463-8074 to find out more about your professional liability insurance options and get started on a quote so you can rest easily at night knowing you've got the necessary protection to avoid serious financial losses.
