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The California-based law firm Errors & Omissions explained the fundamentals of errors and omission as part ofprofessional liability insurance (PLI). When professionals or service firms are tasked to render specific services, mistakes are sometimes inevitable outcomes. The firm handles legal matters arising out of service contracts entered into by professionals and service firms with individuals or with other firms. As part of the primer of sorts on errors and omissions, the firm defined PLI as a kind of insurance policy where a particular company indemnifies policy holders for errors, omissions, or negligence. PLI in a Nutshell In a limited sense, it is analogous to product liability, but covers the performance of a service instead. PLI insurance companies typically provide coverage to defend the insured policy holder in the form of legal services until limits set by the policy have been satisfied. In essence, PLI policies are “claims made policies”. This suggests that the insurance covers claims made during the period of coverage. PLI Claims There are, however, some legalities involved in the definition of a claim with respect to this form of insurance. When a policy defines a claim as knowledge of circumstances, the policy might entail not just provision of legal counsel for a professional but could also be a demand for payment of a sum of money to provide a remedy for an error in question. Another policy may also define a claim as a demand for remedy. Therefore, the usual clients of the California-based law firms are insurance companies or agents, professionals, and service business firms. The law firm also explained through an example that general liability insurance or commercial general liability is the applicable insurance in the case of strictly personal trainer services. However, for a business offering nutritional counseling in addition to personal training, errors and omissions insurance is the applicable insurance. The main difference is that the former protects the business from lawsuits and liability with respect to injury, property damage, or advertising claims. On the other hand, the latter protects the business from malpractice, errors, omissions, and negligence.
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