Reports anticipate that the professional liability insurance market will keep experiencing a higher level of opposition with a developing number of entities that specialize in securing a larger market share. Also called errors and omissions (E&O) insurance, this coverage is a form of liability insurance that helps protect professional advice- and service-providing individuals and companies from undertaking the full cost of defending against a claim of negligence made by a client, and damages awarded in such a civil lawsuit.
This type of coverage focuses on alleged failure to perform on the part of an error or omission in the service or product sold by a policyholder. These are causes for significant legal action that would not be covered by a general liability policy that focuses on more direct forms of harm.
How Professional Liability Works
Professional liability insurance may come in many different forms and names depending on the profession it is covering, especially in the medical and legal fields. This coverage is sometimes required under contract by other businesses that are the beneficiaries of the advice or service in question.
Professional liability insurance policies protect on a claims-made basis, which means protection is adequate only for claims made during the policy tenure. Standard professional liability policies protect the insured against losses arising from any claim or claims made during the policy period because of any covered error, omission, or negligent act that took place in the conduct of the insured’s business during the policy period. Incidents taking place before the coverage was initiated may not be protected, although some policies may include a retroactive date.
Growth and Direction of the Market
Heading into the final months of 2020 and Q1 of 2021, in most situations, growth is likely to be faster in less-developed markets than in developed ones, although much also depends on the competition that exists among underwriters and on future claims.
Recent reporting shows that the healthcare industry is experiencing a hardening professional liability market, especially in response to COVID-19. Globally speaking, experts predict that the professional liability insurance market size will achieve a 3 percent growth through 2026.
In other reporting, the medical professional liability insurance market accounted for the biggest portion—about 41 percent—of the worldwide market. That was followed by a $7.5-billion market size owned by the legal field, and about $15.2 billion to professionals in all other segments combined.
While the market is a global one, the North America portion will still play a significant role that can’t go unnoticed, especially in the United States. Any changes from the U.S. might affect professional liability insurance development, especially as the world reels and recovers from the global pandemic.
About Genesee General
At Genesee, we strive to provide quality insurance solutions for the Commercial E & S sector, and we can help with your small, middle market and large excess and umbrella accounts. Our longstanding expertise has allowed us to successfully serve your clients for over three decades. Our specialized products include coverages for Transportation, Garage, P & C, Professional, Brokerage Property, Specialty Programs and many more. For more information about our products, we invite you to contact us today at (800) 282-8755.