Professionals, such as doctors, lawyers and accountants, have long been held highly accountable for the consequences of their decisions. While such professions are still the Big Three, there are a growing number of other occupations that represent an exposure to liability loss that needs special protection, including pharmacists, architects, engineers, opticians, beauticians, consultants and many others.
Professional Advice – The persons needing insurance are sought out by the general public as experts who can assist with special issues such as personal health, expensive business transactions, or personal crises. Many of these situations also involve a high-level of emotion. When something goes wrong, it is much more likely that a client will pursue “justice” through the courts.
Professional Reputation – Any claim a client makes against a professional involves that individual’s reputation. In so many instances, paying such a claim is an admission that a mistake was made. The professional may suffer from a lowered status and could face sanctions from related professional associations or regulatory authorities. Further, many professionals are proud of their standing and their abilities; admitting being wrong is usually fiercely resisted
Higher Defense Costs – Defending against claims of professional error or incompetence is usually very expensive and time-consuming. Trials will usually involve expert testimony and technical arguments. Since a claim or lawsuit is often viewed by the professional as an attack on his or her abilities, the chances of resolving issues quickly (particularly via a settlement) is extremely low.
Identifying A Loss – The timing between when a loss occurs and when a claim or suit is filed can be a mystery. A professional may find out she’s being sued today for something that happened ten years ago. The potential for a huge time gap before a loss arises makes professional liability a very difficult type of business to underwrite and to price.
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