What type of professionals need professional liability insurance?
Professional liability insurance isn't something that only doctors and lawyers need. According to "The New Century Family Money Book" (Dell Publishing), "This coverage-also called errors and omissions insurance-is used by a diverse array of professionals, including veterinarians, medical technicians, nurses, accountants, architects, insurance and real estate agents and engineers. Find out about your exposure to professional liability by speaking to your employer or trade association. How much will premiums cost? Be prepared for a shock, particularly if you're a physician. But the shock of paying a stiff premium for professional liability insurance is nowhere near the shock of having to cope with a lawsuit arising out of your professional activities." Because professional liability insurance can be both expensive and difficult to find, it pays to contact several insurers in your quest for adequate coverage.

Where can I buy professional liability insurance?
Professional liability insurance -- sometimes called errors and omissions insurance, or simply malpractice insurance -- is needed by a variety of professionals. Doctors and lawyers obviously need it. But so do many other white-collar workers, from veterinarians and accountants to architects and real estate agents. According to "The New Century Family Money Book" (Dell Publishing), "Determining what kind of insurance you need -- and where to obtain it at reasonable cost -- can be perplexing. But as in all areas of insurance, a little detective work on your part is time well spent. First, check with your insurance agent or an insurance agent who specializes in insuring small businesses. Also, check with your professional or trade association(s) about liability insurance. You may be able to purchase it through the association, which can refer you to companies that insure members of your profession." Another good way to find a company willing to write a professional liability policy is to check with your professional colleagues or people who own businesses similar to yours. Your local Chamber of Commerce might have some ideas as well.

Does my liability insurance cover work that I do on a volunteer basis?
You deserve praise if you do volunteer work for a charity or other organization. However, you need to check whether your charitable activities are covered by your insurance. According to "The New Century Family Money Book" (Dell Publishing), "You may find that volunteer work is excluded from both umbrella insurance policies and professional liability policies. This situation got so bad a few years ago that some lawyers were advising people to stop doing volunteer work because of the potential liability. But reason has prevailed in many states, where laws have been enacted that protect most -- but not all -- areas of volunteer work from lawsuit. Still, it is better to be safe than sorry. Ask the organization for which you do volunteer work and/or your attorney about any potential liability." In some instances -- especially if your volunteer work involves driving, serving food or rendering medical services -- you may need to obtain additional liability protection. You could save money if the organization buys the insurance itself or agrees to reimburse you for the cost.

Should I have insurance for my home daycare business?
When parents entrust their children into your care, you are responsible (liable, in insurance and legal terms) for keeping them safe. But no matter how carefully you watch the children in your facility, accidents can and do happen. This leaves you open to unique liability exposures. For example, parents could sue you for negligence if their child is injured while in your care. If you were found guilty and had no insurance, you would have to pay the child's family out of your own pocket.

Luckily, liability insurance can protect you and your assets up to the limits of the policy you buy. The policy limit is the maximum amount the insurance company will pay for covered claims. Claims involving injured children are always volatile and emotional-often leading to larger claims. So if you buy a policy with limits of $1 million, your covered claims will be paid up to that amount.

Why Day Care Programs Need Liability Insurance
There are two important reasons to buy liability coverage. First, in the event of a lawsuit, you will have the broad expertise of the insurance company to defend you in court and ultimately pay your covered claims. Second, the insurance company has extensive knowledge of child care claims, and can offer loss control advice that reduces the chance of a loss. A loss that "does not occur" keeps your premiums down and, more importantly, children safe.

Should I get an umbrella personal liability policy?
Jury awards in liability lawsuits are skyrocketing, so you should seriously consider purchasing an umbrella personal liability policy. An umbrella policy covers liability judgments that exceed the limits of your auto and homeowner's policies. For example, many homeowner's policies provide $300,000 in liability protection. But if your dog takes a bite out of the mailman and a jury awards him $1 million, your homeowner's insurance would pay the first $300,000 and the umbrella policy would cover the remaining $700,000. Umbrella coverage is relatively inexpensive, especially when you consider the amount of protection it affords. The cost of a $1 million policy usually ranges from $75 to $200. In addition to protecting you against claims of personal injury or damage, umbrella coverage can also protect against claims ranging from false arrest to invasion of privacy. A typical policy also provides coverage for libel and slander claims, unless you are a professional writer or broadcaster.

With all of the exclusions, is an umbrella liability policy really a good idea?
An umbrella policy covers liability judgments that exceed the limits of your auto and homeowner's policies. For example, many homeowners' policies provide $300,000 in liability protection. But if your dog takes a bite out of the mailman and a jury awards him $1 million, your homeowner's insurance would pay the first $300,000 and the umbrella policy would cover the remaining $700,000. Umbrella coverage is relatively cheap when you consider the protection it affords. The cost of a $1 million policy usually ranges from $75 to $200. Remember, though, that umbrella insurance is only liability insurance -- it won't pay your medical bills if you get sick or provide for your loved ones when you die. That's what medical and life insurance is for. But considering all the other things an umbrella policy covers and its relatively low cost, it's one of the best insurance bargains available today.