The Top 5 Insurance Claims Made Against Professionals
Professional liability insurance, also known as errors and omissions (E&O) insurance, protects professionals from financial losses that may occur as a result of mistakes or errors during a professional engagement. The most common claims made against professionals fall into five general categories:
- Negligence: This is the most common type of claim made against professionals. It occurs when a professional fails to use the care and skill that a reasonably competent professional would use in the same situation. For example, a doctor who fails to diagnose a patient's illness correctly could be found negligent.
- Misrepresentation: This occurs when a professional makes a false or misleading statement to a client or customer. For example, an accountant who assures a client that their taxes are in order when they are not could be found to have misrepresented their services.
- Breach of contract:** This occurs when a professional fails to fulfill the terms of an agreement with a client or customer. For example, an attorney who fails to file a lawsuit on time could be found to have breached their contract with their client.
- Breach of fiduciary duty:** This occurs when a professional violates the trust that a client or customer has placed in them. For example, a financial advisor who invests their client's money in risky investments without their knowledge or consent could be found to have breached their fiduciary duty.
- Abandonment:** This occurs when a professional terminates their relationship with a client or customer without providing them with adequate notice. For example, a doctor who quits their practice without transferring the patient's medical records to another doctor could be found to have abandoned their patient.
These are just a few of the most common claims made against professionals. If you are a professional, it is important to have E&O insurance to protect yourself from financial losses that may occur as a result of a claim.
Here are some tips on reducing your risk of a professional liability claim:
- Stay up-to-date on your professional knowledge and skills.
- Document your work carefully.
- Be clear and honest with your clients or customers about your services.
- Obtain informed consent from your clients or customers before you begin work.
- Communicate with your clients or customers regularly.
- Be responsive to your clients or customers' concerns.
By following these tips, you can reduce your risk of a professional liability claim. However, even if you do everything right, there is still a chance that you could be sued. That's why it is important to have E&O insurance to protect yourself from financial losses.
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