What is Miscellaneous Professional Liability Insurance?

Professional Liability Insurance, also known as Errors & Omissions (E&O), has traditionally been associated with professions like medicine, law, architecture or accounting where practitioners in these fields carry malpractice insurance to protect themselves against claims alleging mistakes or negligence.

Many small business owners who provide a service, however, are unaware that they, too, can safeguard against losses related to customer claims with Miscellaneous Professional Liability Insurance (MPL), which covers a diverse list of service professionals—more than 100 different business classes.  

You may benefit from an MPL policy if you perform any service for a fee. This includes:

• Realtors
• Business consultants
• Creative freelancers
• Property managers
• Benefit plan administrators
• Travel agents
• Event planners
• Interior designers
• Outsourced business administrators

MPL vs. Other Management Liability Insurance Options

What makes MPL different from other forms of management liability insurance? Here are some of the closely related policies and the differences between them:

• Directors and officers (D&O) insurance – D&O policies cover lawsuits related to senior management, executives, and board members, as opposed to professional service providers.
• Employment practices liability insurance (EPLI) – Employment practices liability insurance coverage provides assistance for claims from employees and customers if you have third-party coverage. These claims relate to harassment and labor law claims as opposed to negligence or omissions liability.

What does MPL cover?

Miscellaneous professional liability insurance is laser-focused on lawsuits related to providing a professional service.

Common lawsuits for service providers involve:

• Negligence
• Failure to provide service
• Misstatements or misrepresentations
• Errors or omissions

Depending on your provider and dollar amount, MPL insurance may cover defense costs entirely or partially. Make sure to ask your insurance agent about the specifics, such as what triggers the MPL policy and whether there are restrictions on which legal defense firm you can hire.

What does MPL not cover?

As with any insurance policy, there are exceptions. Common exceptions to an MPL policy are:

• General liability claims
• Intentional harm
• Employee disputes or injuries at work
• False advertising
• Coverage provided under another insurance policy

How much does MPL cost?

As with any type of coverage, insurance companies consider many factors when calculating your monthly premium. Some key indicators are:

• Your industry
• How long you’ve been in business
• Location
• Past claims

Rates are generally affordable for many small businesses, especially when compared with MPL losses. For example, a study by Chubb found that the average MPL claim was$227,000, a huge loss for most service providers

Final Thoughts

A miscellaneous professional liability insurance policy can provide peace of mind for professional services firms looking to reduce risk because even if you’ve done everything right, it’s still possible to get caught up in an expensive lawsuit. 

Each business is different, and an insurance expert can help you more accurately identify risks and potential coverage solutions. Learn more about which liability insurance might be a good fit for your company. 

Ask your broker today about Counterpart’s Miscellaneous Professional Liability insurance.