One of the areas of greatest confusion is the difference between professional liability insurance, general liability insurance and product liability insurance. Professional Liability Insurance provides coverage to professionals (business or person) for any alleged act of negligence, error or omission occurring in the performance of their professional activities and duties. It differs from general liability and product liability coverage in that the acts covered are acts performed by an engineer, architect, doctor or lawyer in rendering professional services to their clients. To better understand this coverage, we will have a brief discussion below about Product Liability, Professional Indemnity, and its application and how it works.
A. Product liability
Product liability is the legal responsibility of a manufacturer to a consumer of his product. Liability arises from the negligent manufacture of a product, including faulty or faulty workmanship, materials or components. This is a liability that arises from a manufacturer's failure to properly manufacture, test or warn their product and arises when the product negligently deviates from its intended function.
Product risks include bodily injury or property damage arising from the named insured's products, but only if the bodily injury or property damage occurs outside of premises owned or rented by the named insured. and after physical possession of the products has been relinquished to others and is commercially available.
Completed operations include bodily injury and property damage arising out of operations or the use of any representation or warranty made at any time therein, but only if bodily injury or property damage occurs after such operations have been completed. or abandoned and occur outside the premises. owned or leased to the named insured.
Excluded from general liability and product liability coverage are negligence attributable to professional liability, which includes negligent services or consultations rendered by architects, engineers or other professionals.
The Professional Compensation Policy is designed to address the exclusion of professional services in the CGL / Product Liability Policy. The professional indemnity policy covers negligent services by a professional to their client and covers an act of negligence, error or omission on the part of an insured in the service. Carrying out his professional activities. These professional activities generally include the design, drafting of specifications, feasibility studies, calculations, plans and the supervision of these by the insured professional.
Professional indemnity or errors and omissions insurance protects the insured, its employees and directors against liability arising from their professional negligence. It covers the legal liability to compensate a third party who has suffered injury, loss or damage created by the existence of a duty of care to third parties as a result of an act negligence, error or omission in the provision of professional services by the insured.
In light of today's increasingly contentious society, professional liability insurance offers significant protection to the insured professional.
Coverage applies under the Professional Compensation Policy from the outset of product design and provides protection for any act of professional negligence, error or omission that would result in a third party claim.
C. Applicability of Professional Compensation Coverage
When considering the applicability of Worker's Compensation coverage, there are some basic things to keep in mind.
First, professional indemnity is third party coverage which is liability coverage, not property coverage, which is provided to the insured for claims against the insured of third party claimants.
Second, if the coverage applies from the start of the design phase of the project, a claim will only arise after the product has been delivered and the product has left the premises of the insured.
Coverage for liability that arises in the workplace of insureds should be found elsewhere, such as general liability, all perils or builder or contractor protection and indemnity policies.
Third, of course, the claim must arise from a breach of the professional services provided. There is limited coverage under professional liability for defects in workmanship, materials and / or components. In addition, product liability coverage includes any claims for defective materials or components, manufacturing or manufacturing defect.
Fourth, any inadvertent and unintentional infringement of a patent or infringement of copyright is also covered by this policy.