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Worker's Compensation and Professional Liability Insurance


Worker's Compensation is a type of short term income replacement insurance (a type of disability insurance, really) that is set up and administered by individual states. As the name suggests, workman's compensation insurance is only available to people who have sustained injury and disability while on the job. The percent of income replaced (paid out) in the event of disability varies from state to state.

Worker's Compensation is short term insurance only. It is not a permanent income replacement for long term disability insurance. As the beneficiary reaches maximum medical improvement, they may still be disabled but workman's compensation coverage may end anyway.

Professional Liability Insurance

Professional liability insurance protects businesses and business owners. Professional liability insurance also protects any professional expected to have technical knowledge or expertise such as accountants, architects, engineers, lawyers, physicians from financial losses if a client successfully sues them. Regular homeowner's and business insurances do not cover these events.

There are several types of professional liability insurance:

Errors and Omissions Insurance covers claims resulting from errors you make while conducting your business activities, or your failure to delivers services as agreed. This type of policy will typically cover legal fees, court judgments, and court costs. These sorts of costs are not covered by conventional business insurance policies. If you make an error or fail to perform a service that is expected of you based on standards of professional conduct, you will be exposed to potentially great financial risk if you do not have Errors and Omissions coverage.

Employment Practices Insurance protects business from lawsuits filed by employees; former, current, or prospective. This coverage will protect a business from many different types of lawsuits, including sexual harassment, wrongful termination, discrimination, etc.

Directors and Officers Liability Insurance protects the executives of a company from financial loss in the event that they are personally sued as a result of the performance of their job duties. That is, the personal assets of a company executive are at stake if they are personally sued, unless there is a Directors and Officers Liability Insurance policy in place. Business insurance will not cover personal losses of company executives but Directors and Officers liability insurance will.