Professional Liability Insurance in Texas

What is professional liability insurance? 

Texas professionals who provide expert knowledge or skills are expected to correctly apply their expertise. If mistakes that have significant negative consequences are made, a professional may be held financially liable for those consequences. Professional liability insurance may help professionals shield themselves from the financial consequences of a covered mistake.

Professional liability insurance may protect professionals if they make an error or other mistake when working. Policies usually pay legal costs and settlements if there’s a covered error.

Who in Texas needs to have professional liability coverage? 

Most Texas professionals who apply specific knowledge or skill likely should have professional liability coverage. Without coverage, even a relatively minor error could be financially devastating. Merely defending against a lawsuit can incur significant legal fees and court costs, after all.

Policies are available for most types of professionals. People working in the following fields often purchase coverage:

• Finance (financial planners, financial advisors, wealth managers, etc.)
• Taxation (CPAs, other accountants, tax preparers, bookkeepers, etc.)
• Medical (doctors, nurses, physician assistants, chiropractors, dentists, etc.)
• Law (attorneys, mediators, legal consultants, paralegals, etc.)
• Real estate (brokers, agents, property managers, etc.)
• Construction (architects, engineers, contractors, etc.)
• IT (network administrators, network security monitors, IT consultants, etc.)

What types of professional liability policies are available? 

The many different fields that need professional liability coverage, obviously, don’t all need protection against the same errors and mistakes. Professionals generally get coverage that’s tailored to their particular work. Some of the main professional liability policies available are:

• Medical Malpractice Insurance: Mainly covers errors made by healthcare providers who provide direct patient care. Might cover misdiagnoses, improper treatments, surgical errors and other mistakes.
• Legal Malpractice Insurance: Mainly covers errors committed by legal professionals who work directly with clients. Might cover bad advice, missed deadlines, document inaccuracies and other mistakes.
• Errors and Omissions Insurance (E&O): Mainly for professionals offering advice outside the medical or legal domains. Might be used by professionals ranging from real estate agents and financial advisors, to engineers and IT consultants.
• Directors and Officers Insurance (D&O): Mainly for senior leadership of businesses and nonprofit entities. Might cover these individuals if their decisions adversely affect the organization that they lead.

An insurance agent who specializes in professional liability will be able to help professionals get the type of policy that’s right for their field of work.

Do employers cover the cost of professional liability coverage for employees? 

Businesses that employ professionals normally cover the cost of purchasing professional liability coverage. As long as employees are acting within their professional capacity at the company, they’ll likely be covered.

There are some situations where an employer’s policy might not provide all of the coverage that a professional would like, but this is fairly uncommon. 

Any professionals who are concerned that their employer may not offer sufficient coverage can work with an insurance agent who’s well-versed in professional liability policies. A knowledgeable agent will be able to evaluate an employer’s coverage in light of a professional’s wanted protections, and then make a recommendation as to whether the employee should get their own additional policy.

Do companies cover the cost of professional liability when hiring contractors?

When professionals operate as independent contractors, they’re less likely to be covered by a policy that their hiring company has. Independent contractors normally function as their own business, and therefore typically need their own professional liability policy.

Sometimes, a hiring company will name an independent contractor as an “additional insured.” This could let the professional file a claim against the company’s professional liability policy, in which case the professional might not need their own policy.

Again, a knowledgeable insurance agent can evaluate a company’s policy to determine whether it provides sufficient protection.

Where can Texas professionals find professional liability insurance? 

If you work in Texas and need help with professional liability insurance, contact the independent insurance agents at Steve White Insurance. We’ve worked with professionals in many different fields, and have the expertise necessary to help you find a professional liability policy that’s right for what you do.