Professional liability policies respond to claims alleging negligent performance of professional services. Coverage is defined by the policy's professional services definition, and forms are typically claims-made with defense costs inside the limits.
Consent-to-settle provisions are common, requiring the insured's agreement before resolution.
Alternative Names:
Professional Indemnity Policy, Malpractice Insurance
Why it Matters?
Three features distinguish these policies from general liability and shape every claim: claims-made triggering with retroactive dates, defense within limits so litigation erodes settlement capacity, and consent-to-settle clauses giving the insured a veto. The consent provision creates genuine conflict where an insured wants to fight a claim the carrier would settle, and hammer clauses limiting the carrier's exposure if consent is withheld are the common compromise.
Frequently Confused with
Related terms
Frequently asked questions
What is a consent-to-settle provision?
What is a hammer clause?
