What is the Difference Between Liability and Malpractice Insurance?

Casualty insurance is a broad term used to describe third-party insurance policies. Also known as liability insurance, this type of coverage generally protects a business or individual from damages they might have caused intentionally or accidentally to another party. There are many different kinds of liability insurance, and a major one is malpractice insurance. The difference between liability and malpractice insurance is simply that a malpractice policy is a variety of liability policy, which focuses specifically on protecting doctors, lawyers and other professionals if a client claims damages.

Perhaps the best known kind of liability and malpractice insurance is medical malpractice insurance. This type of insurance policy is geared toward medical professionals. It could be triggered, for example, if a doctor is sued by a patient for causing harm during a surgical operation. A patient might also bring a lawsuit if a medical professional fails to properly diagnose a condition or disease.

Typically, such a policy works like any other type of property or casualty insurance. Medical professionals shop for malpractice insurance through their insurance broker or agent. Every year, they must either renew with their current malpractice insurance company or search for cheaper or better insurance from another insurance company. The medical professional pays an annual premium for their coverage, which protects him or her up to a certain limit. Medical malpractice coverage can also include legal fees that a medical professional might have if they are sued.

Other types of liability insurance include professional liability insurance, which is similar to medical malpractice insurance but can be designed for other professionals, such as lawyers, architects and engineers. Professional liability insurance is similar to other liability and malpractice insurance products. It is meant to protect the lawyer or architect in the event that a clients, partner, or other third party claims that they were harmed financially or otherwise while the professional was providing services. The professional pays his or her professional liability insurance company a set premium each year for a certain amount of insurance coverage.

Depending on the nature of a company and its size, a business enterprise might seek to purchase other kinds of liability and malpractice insurance. For larger organizations with a board and executives, directors and officers liability insurance could provide protection to the company and those individual officers if they are sued by investors. Another kind of liability and malpractice insurance is errors and omissions insurance. This kind of insurance is very similar to professional liability insurance in that it protects professionals like accountants and insurance agents if they fail to provide proper advice to a client and the client then seeks damages from them.