What is not covered by malpractice insurance?

Malpractice insurance, also known as professional liability insurance, is designed to protect professionals from claims of negligence or errors in their professional services. However, it does not cover all types of claims or liabilities.

What is Not Covered by Malpractice Insurance?

While crucial for professionals, malpractice insurance has specific exclusions that define the limits of its coverage. Understanding these limitations is essential to identify potential gaps in protection and consider additional insurance policies.

Here are the key areas generally not covered by malpractice insurance:

1. Allegations of Physical and/or Sexual Abuse

Professional liability coverage explicitly excludes claims arising from allegations of physical and/or sexual abuse. It is important to note, however, that if an abuse claim is unfounded, and the insured individual does not admit guilt, the insurance carrier will typically provide defense coverage to contest the allegations.

2. Intentional, Criminal, or Fraudulent Acts

Malpractice insurance is designed to cover unintentional errors or negligence, not deliberate misconduct. This includes:

• Intentional harm: Any act where the professional purposely injures a client or patient.
• Criminal acts: Claims arising from criminal charges or convictions.
• Fraudulent activities: Dishonest actions, misrepresentation, or deceit performed for personal gain.

3. General Business Liabilities

Malpractice insurance focuses on professional services. It does not cover liabilities related to the general operation of a business, such as:

• Bodily injury to third parties: Injuries sustained by visitors on the business premises (e.g., slips and falls). This is typically covered by General Liability Insurance.
• Property damage: Damage to a client's or third party's property that is unrelated to professional services. This also falls under General Liability Insurance.
• Advertising injury: Claims of libel, slander, copyright infringement, or false advertising, unless directly related to professional communication.

4. Employee-Related Claims

Issues concerning employees are generally not covered under malpractice policies:

• Employee injuries: Workplace accidents or illnesses affecting staff are covered by Workers' Compensation Insurance.
• Employment practices violations: Claims such as discrimination, wrongful termination, or harassment are typically addressed by Employment Practices Liability Insurance (EPLI).

5. Services Outside the Scope of Practice

If a professional provides services or performs procedures that fall outside their licensed scope of practice, their malpractice insurance may not cover any resulting claims. This emphasizes the importance of adhering to professional boundaries and qualifications.

6. Punitive Damages

While malpractice insurance often covers compensatory damages (e.g., medical expenses, lost wages, pain and suffering), it frequently excludes punitive damages. Punitive damages are awarded to punish the defendant for egregious conduct, rather than to compensate the plaintiff, and many policies or state laws prohibit their coverage by insurance.

7. Property Damage to Your Own Equipment or Premises

Malpractice insurance does not cover damage to your own office, equipment, or supplies. This type of coverage is usually found in Commercial Property Insurance.

8. Claims Arising from Prior Acts Without Prior Acts Coverage

If a malpractice policy is a "claims-made" policy, it typically only covers claims that are made while the policy is in force, for incidents that occurred on or after a "retroactive date." If an incident occurred before the retroactive date, or if a "tail coverage" (extended reporting period) policy is not purchased after a claims-made policy lapses, claims arising from those earlier events may not be covered.

Summary of Exclusions

Understanding these exclusions is crucial for professionals to ensure they have comprehensive protection for all aspects of their practice.