Professional Liability Insurance In a Litigious Era, This Coverage Protects Against Errors Real and Imagined

When you have a high-profile, high-stakes job, it pays to be careful. But no matter how dedicated you are, things can still go wrong. "Some people think they don't need professional liability insurance, but that's foolish," says Clark Sitzes, executive vice president of the Professional Insurance Agents Western Alliance. "We live in a litigious society, and everyone has access to the courts. We all make mistakes, but you don't even have to do anything wrong to get sued." Whether you've been hit by a frivolous lawsuit or made a tragic error, this guide will help you find the right policy and protection.

As with other types of insurance, the cost of professional liability insurance can vary significantly. Your rate will depend on your line of work, the state where you live or work and the kind of coverage you want, but it may not cost as much as you imagine. The following examples — which don't include general business liability insurance — are based on a marketing consulting company in the San Francisco Bay Area.

Sources: GEICO, Progressive, Insureon 2016

You'd think that attorneys would be especially careful about the details of their insurance policy. After all, it's their job to pay attention to the fine print. But according to past reports by the National Law Review (NLR), few attorneys study their policies until someone files a claim against them. It's a lesson for everyone: No matter who or are or what you do, it's important to know the details of your policy before it's too late.

If you're an attorney, you should be especially careful to avoid a so-called "never pay" policy, AKA a policy with so many loopholes and exceptions that you are unlikely to ever receive any benefits. Here are some issues to consider, according to the NLR:

• Apply with care
  You'll be asked to list any situations that could result in a claim in the future. The insurance company asks this question to make sure you aren't buying coverage specifically to handle a claim that you know is coming down the road. It's important to answer this fully and correctly because insurance companies will simply cancel a policy if one of your answers later turns out to be incorrect or incomplete.

• Changing insurers? Be careful
  If you move on to a different insurer, consider purchasing "tail coverage" from your previous insurer. This will cover claims made after you switched based on incidents that occurred before you switched.

• Be on time
  Many policies require that claims must be reported to them within a specific period of time, usually 30 or 60 days. Watch out for this: If you wait too long, your coverage could be denied.

• Check exclusions carefully
  Your professional liability policy will only cover you for your "professional" work—meaning any tasks you perform specifically as an attorney. Because lawyers today often have to multitask—they may be practicing law one hour and doing some information technology work the next— check the policy to make sure what parts of the job it really covers.

If you're a professional or a small business owner, you know that legal trouble can come from many different directions. Professional liability coverage offers protection during such suits, but as a general rule, it won't protect you if you're being charged with an actual crime. (Insurers might have to defend you during a subsequent civil claim, though). And if the claim isn't directly related to the work that you do, it probably won't be covered by professional liability insurance. For that reason, you may need more than one type of protection.

A simple "I'm sorry" can be one of the most powerful protections against lawsuits. Studies have shown that a sincere moment of empathy can help prevent lawsuits.

People tend to sue when they are angry, and few things are more enraging than a person who shirks responsibility. To reduce lawsuits, hospitals are now training doctors and nurses to express sympathy to patients and families who are victims of medical errors. They learn how to express regret without blame. The site for one training program, called "Sorry Works," sums up the approach: "Clinicians should NOT prematurely admit fault or assign blame. Also, do NOT get defensive. Simply say you are sorry the event happened (as you should be!) and you feel bad for the patient/family."

How else can you avoid lawsuits? "The number-one rule of thumb is to take good, detailed notes and file them where they can found later if needed," Adds Clark Sitzes. "Many claims happen because a client says they made a specific request but the professional never followed through. Having these things in writing will clear up any confusion."

"It can also help to be sincere in your efforts and show empathy," says Sitzes. "But, again, we live in a litigious society. You can put your fate in the hands of a jury, or you can have insurance and sleep at night."

Being sued by a client is not just financially draining. You may wrestle with heartache, fear, anger, humiliation, and depression - sometimes for years. It's not always possible to ward off a lawsuit, even one that's unjustified, but here's a look at the best strategies for avoiding lawsuits in certain professions.

Almost all doctors carry malpractice insurance, which is the medical version of professional liability insurance. The insurance carrier that issues the policy will aggressively fight most claims, but it's better for physicians to avoid lawsuits in the first place. In addition to practicing medicine as ethically and carefully as possible, there are many things you can do to protect yourselves and their employer:

• Show patients that you care about them. Genuine warmth, empathy and a good bedside manner will go far, as will good manners. Discussing malpractice, Gregory Hines, MD, past president of the American College of Emergency Physicians, told Hippocrates magazine that "a doctor who rushes in and forgets to shake hands, identify himself, and figure out who everybody else in the room is already has one strike against him...If people like their doctor, they'll usually forgive him a mistake. If he's an arrogant jerk, they're going to get him."
• Be respectful. As Philadelphia defense attorney David Kwass has said, "A lot of the cases I see are what I call torts of dignity. It's not that poor medicine has been practiced or there's been a bad medical outcome. It's that the patient has been made to feel unworthy, stupid, not cared about, or not listened to."
• Be honest. Doctors who fail to fully inform patients of a treatment's risks put themselves at risk of a lawsuit. And if it's clear that you have made a mistake, own up to it.
• Get informed consent. A signed agreement showing that a patient is aware of the potential risk of a treatment or procedure is a powerful defense against lawsuits. Find a translator if necessary.
• Keep good records and be as specific as possible. If you document every interaction with a patient in the medical chart, you're less likely to be caught off guard. Don't write "I discussed potential risks" - instead, name each potential risk you warned the patient about.
• If you make a change in a medical record, don't erase anything. Instead, put a line through the error, correct it, write your initials beside the change, and date it, then add a note explaining why the change was necessary. In court, erasures look suspicious.
• Follow up on tests, especially before a procedure.
• Get backup. As soon as you've had a chance to say, "I'm sorry"—or perhaps even before—call your risk manager, insurance company, attorney, or someone else on your side to explain the situation.

Nurses have a special duty to help patients recover and heal. Nursing is often a labor of love, but it can also be fast-paced, chaotic and stressful. While mistakes are inevitable, nurses can take steps to protect themselves from lawsuits. Here are some tips from American Nurse Today:

• Know your limits. Don't perform tasks that you don't know how to do.
• Stay informed. Education doesn't end with nursing school; pursue opportunities to keep up-to-date with your field and add to your knowledge.
• Be open and honest with patients, but don't rush to take blame for anything.
• Even if the hospital or facility where you work has its own liability insurance, strongly consider carrying your own policy. If there's ever a suit against you, you'll want an attorney who is working for you, not your employer.
• Make sure there's a record of all your encounters with patients.
• Know your equipment. Attend in-house training sessions to make sure you know how to handle any failures or breakdowns.
• Communicate. Open lines of communication with doctors and other nurses can prevent dangerous and costly misunderstandings.

Attorneys often find themselves on the business end of a lawsuit. Even though they practice law, they don't always know how to protect themselves. Here are some tips from the American Bar Association.

• Have professional malpractice insurance, and make sure you read the fine print.
• Get a written retainer that spells out your duties each time you sign a new client.
• Keep records of important decisions and conversations.
• Keep your client in the loop. He or she should have a clear understanding of the options and the possible outcomes.
• Avoid irritating your clients. Return calls and emails on time, act professional, and don't ambush them with large bills that they don't expect.
• Watch those deadlines. Late filings are a leading cause of liability suits against attorneys. Procrastinating or simply losing track of a schedule can be a costly mistake.
• Be professional and civil at all times. Treat people well, and your reputation will get around.
• Get feedback. Check in with your clients regularly to make sure they are satisfied with your performance.

As a consultant, you help companies achieve their goals and get back on target. In essence, you make your living by dishing out valuable advice. But if you want to avoid getting sued, you may need some advice of your own.

• Go easy on promises. Assuring a client that they can hit specific numbers with your help just sets everyone up for disappointment.
• Don't forget about your clients. Check in to see if they are following your recommendations. If they aren't, ask why.
• Get it in writing. Document every important aspect of the job—including your specific duties and your expectations for your client.
• Keep your clients happy. If things don't go exactly according to plan, consider offering a discount or a refund. You might be able to avoid hard feelings and even more costly consequences in the future.

It takes a team of professionals to build any decent-sized project. But if something goes wrong, it's often engineers who end up taking the blame—and dealing with the lawsuits. Want to avoid trouble? Here are some tips:

• Be clear in your duties. You're an engineer, not a contractor or a building inspector. If you're writing a report on a job site, make it clear that the final inspection is up to someone else.
• When talking, keep it simple. Spoken words can be easily misunderstood or misremembered. If you have a complicated issue to discuss with a contractor, put it in writing.
• Keep careful records. Treat your notes as if they might someday become exhibits in a lawsuit, because they might.
• Keep an open line of communication with clients. Encourage them to pay close attention to the progress of the project.

Members of the clergy have duties that go far beyond leading the Sunday or Saturday services. Pastors, priests, ministers, imams and rabbis often serve as spiritual counselors, and their words carry serious weight with their parishioners. Just like other counselors or therapists, members of the clergy can become targets of lawsuits if someone feels harmed or damaged by their advice. Here are some steps that the clergy can take to protect themselves.

• Carry professional liability insurance especially designed for the clergy.
• Understand "clergy privilege." In some states, clergy members who speak with parishioners have the same sort of protection that attorneys have when speaking to clients. But the privilege can have limits. In some places, for example, you may be required to report a suspected case of child abuse.
• Keep it spiritual. Clergy members are trained to give spiritual advice, not guidance on how to manage money or cope with an illness. Moving beyond your training can invite trouble.
• Get it in writing. If you're counseling someone, have the person sign an agreement stating that the counseling is spiritual or biblical and not professional.
• Get backup. If you're working with someone who needs mental health care, refer them to the right professional.
• Keep records. Clergy members should take note of each counseling session, including the nature of the problem and the spiritual advice that was given.

Clark Sitzes is the executive vice president of the Professional Insurance Agents Western Alliance and an independent insurance agent for more than a decade. The alliance is a membership organization based in Vancouver, Washington, with agencies in nine western states.

• Insurance Information Institute (III)
  An insurance industry organization promoting insurance education.
• International Risk Management Institute.
  This organization has an educational, subscription-based website that addresses all aspects of risk management, including protection from professional liability suits.
• Professional Liability Underwriting Society
  This organization offers seminars, workshops and educational programs about professional liability insurance.
• Sorry Works
  This program, and the accompanying book, help healthcare workers learn how to show sympathy and offer an apology when a mistake happens.
• Standing Committee on Lawyer's Professional Liability
  This arm of the American Bar Association helps attorneys prevent malpractice claims and offers help for those who get sued in the line of duty.
• Litigation Center of the American Medical Association
  This group within the AMA helps defend doctors against malpractice claims.
• businessinsurance.com
  A news site that keeps up on the latest developments in the world of business insurance.