Beyond providing what is basically malpractice coverage to policyholders, professional liability insurance often includes a number of additional cash benefits that can easily go unnoticed, especially during the rush of the claims process.
The terms and availability of these benefits, called supplementary payments, vary widely between insurance companies and are often presented as a footnote to primary limits on a professional liability policy. Here are five of the more common and useful supplementary payments that you might not have known were there.
Loss of Earnings
Reimbursement for loss of earnings is a fairly standard offering on a professional liability insurance policy. Almost invariably, the process of investigating a claim will draw you away from your other, more lucrative daily activities. In the event the insurance company specifically requests your time to investigate or defend a claim, they will often reimburse you for your time and any reasonable travel expenses based on the conditions and terms listed in the policy. For example, up to a maximum of $500 per day might be the supplemental benefit.
Free Pre-claims assistance
Until a third party makes an official, written or verbal demand for money or services, there has not officially been a claim filed against you. However, if you discover an instance that you think might lead to a claim (such as the collapse of a deck you designed), your insurance company may want to intervene before a claim is filed.
Any of these preemptive payments made by the insurance company fall under the heading of pre-claims assistance and most often will not count against the limits provided on your professional liability insurance policy.
Crisis Event Expenses
This little known benefit is not as common as the supplementary payments listed above. In the event of a claim resulting from a high profile accident, your professional liability insurance company may offer to pay a reasonable amount of money to bring in a public relations firm.
Insurers recognize your professional reputation is valuable, especially for larger professional firms. Whether your firm is well known internationally or respectable just within your industry or locality, this hidden benefit can help mitigate the negative effects of a claim on your bottom line.
This supplementary payment may also be triggered in event of the death or departure of a “rainmaker”, an incident of workplace violence or any other event that an insured believes may reasonably and significantly impact the firm’s reputation.
For example, up to $10,000 per event and $30,000 for all events might be the supplemental benefit.
Disciplinary Proceedings & Regulatory Expenses
Defending an accusation of professional misconduct can be costly. Under the provisions of this hidden benefit legal fees in the defense or appeal of an accusation may be covered by your professional liability policy. For example, up to $25,000 each proceeding and $50,000 for all proceedings might be the supplemental benefit. If the accusation is found to be legitimate, however, this coverage would not pay any resulting fines or penalties.
Multi – Year Policies
Premium rates for most professional liability policies have been on a steady decline since the 2008 recession. Capitalize on this by asking your professional liability insurance agent for multi-year premium options. Not only do you dodge the hassle of the application process at the annual renewal, but your premium will not be considered for an increase until the end of the multi-year term.
Note that benefits we have listed are termed supplementary payments because they are offered in addition to the primary limits on a professional liability policy. Payments in any of these areas typically would not erode the primary limits shown on the policy declarations page. Feel free to contact us with any questions.