For insurance agents: Professional liability cover - Professional Liability South Africa

Professional liability cover, as the title implies, protects professionals from claims of liability. The type of cover required depends on the type of liability the insured is at risk of. Doctor’s for example, may be held liable for personal injury as a result of poor treatment. Given the risk of this is greater than the risk of, say someone tripping downstairs at an office, it requires a different underwriting process and different insurance policy.

Doctors and lawyers require malpractice insurance. For insurance agents, errors and omissions insurance may protect them from claims made by clients for failure of services. This type of cover is not included in a general liability insurance policy.

Errors and omissions insurance for insurance agents

This type of cover is similar to a poor workmanship liability insurance policy in that it covers the service provider in the event that the client holds him or her responsible when the service fails, or does not perform as promised. An insurance agent will be protected from claims made by clients should their insurance policy not cover them adequately after being advised by a broker.

As it is the insurance agent’s responsibility to liaise with the insurance company and obtain proper cover on behalf of the insured, the insured may hold him or her responsible if the insurance company rejects a claim on the grounds of inadequate cover.

What to look for when shopping for liability cover

A good liability insurance policy will cover legal fees and expenses as well as damages, should the case be awarded to the prosecutor. There is usually an excess applied to liability insurance, which should be adjustable for the insured. A percentage based excess may result in cheaper premiums, but could see the insured pay out more than he or she can afford.

Check if the liability insurance policy covers previous claims. Most liability policies do not cover claims already made, but future claims from the date of inception. Also check what damages the liability policy covers. Does it include trauma and mental anguish? This may be claimed for by the client.

When opting into liability cover, make sure it includes likely claims you may experience in your field.