What is Professional Liability Insurance in Calgary?

Professional liability insurance is a type of liability insurance for professionals who provide services and consultants who advise clients. Also known as errors and omissions insurance, Calgary professionals may get sued by clients for allegations of negligence, errors, breach of duty, missed deadlines, and more.

Regardless of the verdict, these expensive lawsuits may incur unexpected expenses that affect your business’s financial status. However, with professional liability insurance, the insurance company covers the legal costs, allowing you to bounce back easily and grow your business.

At Sharp Insurance, we provide professional liability insurance coverage for our clients. Our commercial insurance solutions allow our clients to run their businesses smoothly against any obstacles.

What is Covered under a Calgary Professional Liability Policy?

• Defence costs: PLI policies cover defence costs, like lawyer fees, court costs, and legal proceedings. Even if the client loses the case, defence costs are still pricey.
• Settlement and judgments: If the client wins the case, you have to pay settlement costs or court-awarded damages. PLI covers these expensive costs, so you don’t have to pay them out of pocket.
• Errors, omissions, and negligence: If errors or omissions in your work, or any acts that can be considered negligence cause the client financial loss, they can sue you for compensation.
• Misrepresentation or inaccurate professional advice: If a client alleges that your professional advice or recommendations caused them financial loss, they could file a lawsuit. With PLI coverage, the legal costs are covered by the insurance company.
• Breach of contract: If a client sues you for failing to meet contractual obligations or performance expectations, PLI will help cover the legal expenses and defence fees.
• Project delays: Missed deadlines and project delays may cause financial loss to clients in some cases. The insurance company will cover the legal and defence costs if they sue you for not delivering on time.

Examples of Professional Liability Insurance Claims

• Accounting Errors: An accountant makes a miscalculation in a client’s tax return, leading to an audit and financial penalties.
• Legal Negligence: A lawyer misses a critical filing deadline, causing their client to lose a lawsuit.
• Medical Malpractice: A doctor prescribes the wrong medication and the patient is harmed. The patient sues for medical negligence and malpractice insurance.
• Architectural Errors: An architect designs a commercial building, but a miscalculation in the plans leads to structural issues.
• Real Estate Agent Misrepresentation: A real estate agent fails to disclose a known defect in a home before a sale. The buyer later discovers the issue and sues for misrepresentation.

How to Get Cheaper Professional Liability Insurance

You don’t have to pay a lot of money to protect your business. Here are some tips to reduce professional liability insurance premiums.

1. Keep your claims history clean: Insurance companies offer lower premiums to businesses with no claims. Implementing good risk management strategies can help you avoid having to make claims. Also, if you can afford to pay out of pocket for a small damage instead of making a claim, that will help you in the long run.
2. Implement risk management strategies: Show insurers that you care about protecting your company from potential liabilities by developing comprehensive risk management strategies. This includes regular risk assessments, employee training programs, and clear communication protocols with clients.
3. Shop around and compare quotes: Different insurance companies offer varied quotes. Obtain multiple quotes before selecting a professional liability insurance policy to make sure you get the best value for money while covering your insurance needs.
4. Consider higher deductibles: Higher deductibles equal lower premiums. However, it’s important to make sure you can afford the premium rate whenever a claim arises.
5. Bundle insurance policies: Consider buying different types of business insurance, like professional liability insurance, commercial property insurance, and business liability insurance from the same insurance carrier to get a bundling discount.
6. Engage in open communication with clients: Always maintain clear and consistent communication to prevent misunderstandings that may eventually lead to claims. Document all agreements and expectations.
7. Review and update your professional liability insurance policy periodically: Reassessing your insurance needs will help you make sure you’re not overinsured or underinsured. Adjust your policy limit to align with your current risk exposure to save in premiums.

How to File a Calgary Professional Liability Insurance Claim

• Identify a potential claim: The first step is to recognize situations that may lead to a professional liability claim, like client complaints, legal notices, or discovering mistakes in your work that would harm a client. The sooner you recognize these signs, the better, as any delay might affect coverage.

• Review your insurance policy: Check your policy carefully to learn about the protections it offers and the exclusions. Also, find out the deadline for notifying your insurer about any claims and prepare the necessary documents for filing a claim.

• Notify your insurance company: Contact your insurance company and provide a description of the incident, the names and roles of the parties involved, and any supporting documents.

• Cooperate during the investigation: Next, your insurance company will investigate the incident. Provide any information they need and avoid admitting fault or liability, or making payments without notifying the insurance company first.

• Understand your policy terms: Know your deductible amount so you can pay it before the coverage applies. Also be aware of your coverage limits, to know the amounts payable under your professional liability insurance policy. This knowledge helps you manage expectations regarding what you will receive from the insurance company.

• Engage legal counsel if necessary: In some situations, you may need a professional liability lawyer, depending on the complexity of the claim.

• Maintain open communication: Stay in contact with your insurance company, providing any updates on developments regarding the case. This ensures the claims process goes smoothly.

Tips for Avoiding Professional Liability Insurance Claims

If you mitigate potential risks, it will help you minimize claims, which will protect your reputation and help you maintain a clean record. Here are our recommendations to avoid Calgary professional liability insurance claims.

• Communicate Clearly: Always keep an open and transparent communication channel so that there’s a mutual understanding of expectations, project scopes, and deliverables. Relay and document any updates promptly and clearly.

• Keep Detailed Contracts: Develop contracts that outline the responsibilities of all parties, project timelines, payment terms, and procedures for handling changes or disputes. These contracts will serve as references, potentially deterring claims.

• Develop Thorough Documentation: Keep records of all client interactions, agreements, and project developments. These will demonstrate the services provided and any decisions made, which is helpful if a claim arises.

• Adhere to Industry Standards: Ensuring your work is in compliance with the latest industry standards and best practices shows professionalism and reduces the likelihood of errors.

• Create Client Complaint Resolution Process: Establish a formal process for addressing client complaints timely and effectively, preventing escalations into formal claims or lawsuits.

• Maintain Professional Development: Keep educating and training to enhance your skills and knowledge. This can help you avoid making mistakes that can lead to claims.

Following these tips can help you minimize the number of claims, but doesn’t prevent them from happening. Sometimes, mistakes happen and unsatisfied clients come out of nowhere. That’s why having professional liability insurance is important to help businesses to stay protected under any circumstances.