Module 3: Professional Liability Insurance: Introduction

The discussion of CGL in module C-02-CGL lays the groundwork for this module that introduces the purpose and sources of Professional Liability Insurance and the elements of negligence claims. The module helps the student recognize the main components of PLI policies and understand the scope of their coverage, including who is covered and where coverage applies. It describes the types of damages or losses covered, how defense is covered, and an Insurer’s duty to defend. The module explains how various components of PLI policies shape coverage, including policy conditions, exclusions, policy limits, deductibles and retentions. The rationale for claims-made coverage, various types of claims-made policies, what constitutes a claim, when a claim is made, and triggers for claims-made coverage are also explored. The module reviews the importance of the application process, critical factors considered in underwriting a potential insured, and how risk management activities impact the underwriting process. The module also addresses how to coordinate PLI coverage with CGL coverage – recognizing key factors for analyzing and coordinating coverages, and key causes of gaps and overlaps.

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