What is Professional Liability Insurance and Who Needs It?

Understanding Professional Liability Insurance

Professional liability insurance, also known as professional indemnity insurance or errors and omissions insurance, protects professionals against claims of negligence, whether actual or alleged. These claims are typically brought by clients or beneficiaries of your services who believe a mistake, omission, or negligent act caused financial or reputational harm.

Why Professionals Need This Cover

If you provide professional services, you are at risk of a claim, even when your work is sound. Whether you’re a doctor, lawyer, accountant, or real estate professional, a single civil claim can impact your business and finances. This type of insurance policy helps cover legal defence costs and compensation payouts for claims of negligent advice or poor service. In many professions, it is legally required or expected under contract.

Claims-Made Policy Explained

Most professional liability insurance policies are structured on a claims-made basis. This means the claim must be made during the policy period, and the incident must have occurred after the coverage began. If your policy expires or is cancelled and a claim is made later, even if the incident happened while you were covered, you may not be protected unless retroactive cover is in place.

The Importance of Retroactive Cover

At Shackleton Risk Management, we provide retroactive date cover to protect professionals from claims related to earlier work. This is especially important when switching insurers or renewing after a lapse. Always ensure this feature is part of your insurance cover to avoid gaps in protection.

Renewing Annually to Maintain Continuous Cover

Each year, your liability coverage needs may change. Gross income, service offerings, and the volume or complexity of your work can all affect risk levels. Professional liability insurance should be renewed annually to ensure the cover remains accurate. A gap in coverage could mean claims related to past work are no longer covered, even if you were previously insured.

So, Why Do You Need It?

You’ve invested time and energy into building your professional reputation. One unexpected claim—whether valid or not—can lead to financial loss, reputational damage, or even legal action. Professional liability insurance covers you for legal costs, settlements, and related expenses, helping you continue to provide professional services with peace of mind.

Get Tailored Cover from Shackleton Risk Management

At Shackleton Risk Management, we specialise in professional indemnity insurance for attorneys, medical professionals, fiduciaries, and other service providers.

✅ Get cover that aligns with your risk and your industry.
📞 Contact us today or click here to apply for cover.