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Updated Jan 23, 2024

What Is Professional Negligence?

Some professionals are vulnerable to lawsuits when mistakes occur – even unintentionally.

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Kimberlee Leonard, Senior Analyst & Expert on Business Operations
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Service professionals have an obligation to do their jobs within set standards so no harm comes to their clients. When a professional performs their duties in a manner that leads to property damage or bodily injury, they may be liable for negligence.

Learn how professional negligence occurs, what industries are most at risk and how to reduce the chances of professional negligence claims.

What is professional negligence?

Professional negligence occurs when an industry professional doesn’t properly fulfill their duties or obligations. While negligent acts are usually accidents, any resulting harm could lead to massive lawsuits stemming from someone not carrying out their responsibilities appropriately. Medical malpractice is an example of a professional negligence situation. 

When professionals take on work, they’re expected to exercise “reasonable care” in carrying out their duties. Reasonable care means that others in the same situation would take specific actions to ensure a positive outcome. Mistakes can happen when someone doesn’t adhere to reasonable care, resulting in professional negligence.

FYIDid you know
Malpractice insurance covers the mistakes medical or legal professionals make while conducting regular business operations.

What professions are vulnerable to negligence?

Specific industries are more prone to negligence cases. However, negligence can happen in nearly any service industry. Those who provide professional services are often held to high standards and can be sued when problems arise. 

These are some of the most common professions vulnerable to professional negligence accusations: 

  • Lawyer
  • Insurance broker
  • Accountant
  • Architect
  • Doctor
  • Realtor
  • Financial advisor

However, other service providers should also protect themselves against negligence claims, including the following: 

  • Dietitians
  • Physical trainers
  • HVAC installers
  • General contractors
  • Teachers
  • Tutors

Professional negligence is covered by professional liability insurance, sometimes known as errors and omissions (E&O) insurance. This insurance provides a legal defense and pays the claims up to policy limits for professional negligence. 

Bottom LineBottom line
No one who provides a professional service is beyond the scope of negligence accusations. This is why having the right business insurance in place is essential.

Examples of professional negligence

There are many examples of professional negligence that happen every day. Here are a few typical instances:

Example 1: A surgeon performs the wrong procedure.

A surgeon performs knee surgery on someone’s right knee instead of the left. This is an example of a common negligence incident – and one that has led to many lawsuits. Now, as part of their preop procedures, surgeons will meet with the patient and confirm the surgery type and location. They’ll use a Sharpie to mark the surgical spot with the patient watching to ensure it’s correct. 

Example 2: A trainer teaches the wrong exercise form.

Another example of professional negligence is a physical trainer who’s sued because a client hurt their back performing an exercise the trainer taught them. The trainer taught and reinforced poor form in the exercise, leading to the client’s injury. This is professional negligence because physical trainers are expected to know and teach the correct form.

Example 3: Stairs collapse in a house.

A general contractor builds a house. The staircase later collapses due to a structural error, damaging the home and injuring the homeowner. General contractors are expected to do work that meets safety standards, and an oversight could result in a lawsuit for professional negligence.

Example 4: A tutor says a student will get into an Ivy League school.

A tutor boasts about how their students always get accepted to Ivy League schools and promises to do the same for a new client. This claim sets high expectations when, for many reasons, there’s no guarantee any student will gain admittance to an Ivy League school. Essentially, the tutor shouldn’t set inappropriate expectations, as they could lead to professional negligence accusations.

Did You Know?Did you know
A business owner's policy doesn't cover professional liability claims, workers' compensation, or health or disability insurance. You'll need separate policies for these coverages.

Talk to other professionals.

Talk to industry peers and attend industry conferences or professional development classes. You’ll stay abreast of what’s going on in the industry, learn what others do to protect themselves and get an idea of how to react when negligence claims occur. Learn from others to help protect yourself. 

How professional liability insurance can protect you

Professional liability insurance isn’t required in all professions. For example, it’s required for doctors but not for physical trainers. Still, even if it’s not required, it can be an excellent idea. Consider your industry and options. Many professionals whose industry has lower lawsuit risks can get a professional liability insurance policy at a reasonable rate. 

Professional liability insurance is there when someone files an insurance claim or lawsuit stating you didn’t perform your job professionally. It’s different from general liability insurance, which covers you from third-party accidents, such as slip-and-fall scenarios that have nothing to do with your professionalism. 

The best liability insurance providers offer policies that provide a legal defense for your situation, including attorneys’ fees, expert witnesses and investigation services. They will also pay up to a policy’s limit for a settlement or judgment. You likely won’t have to pay anything out of pocket if you get sued. 

FYIDid you know
According to the Institute for Legal Reform, $30.2 billion was paid out in professional liability claims in the U.S. in 2020, the most recent year figures were available. Between 2016 and 2020, annual growth in payouts was 6.9 percent. As claims continue to mount, there's a strong commercial argument for taking out professional liability insurance.

Professional negligence FAQ

If a professional negligence claim is brought against you, you'll be liable for all legal costs and compensation to the other party. The total cost could run into hundreds of thousands of dollars, sometimes even more. Compare this to the average $60 monthly cost of professional liability insurance. A policy should provide up to $2 million worth of coverage. If you need more, you could take out an excess liability insurance policy.
In general, no. If your employee was injured at work, they could seek a workers' compensation settlement. However, they may be able to claim employer negligence if your action (or inaction) leads to an injury, illness, damage or theft. There may also be occasions when an employee can sue you if you ask them to do something not covered by their employment contract. They may also have a case if they suffer injury from the actions of an engaged third party like a contractor.
This question generally applies to the healthcare sector, though exceptions exist. Malpractice is when a professional fails to uphold the standards of care expected of someone competent and qualified in their field while being aware of the potential consequences of their actions and decisions. If they have deviated from an expected course of action when you're in their care and it causes harm, you may have a case. Negligence is a failure to uphold a duty of care through a lack of diligence or caution, regardless of professional status.
Professional and business negligence are similar but not identical. In legal parlance, business negligence is known as "ordinary negligence." It describes when a person is injured as a direct result of a company not exercising a general standard of reasonable care, regardless of intent. For example, consider a business selling a faulty product or failing to maintain safe premises. These are general business activities that do not require specialist professional skills to execute. Professional negligence is more specific and relates to the expectations and standards of a particular line of work. It refers to an employee of a business (including the owner) not meeting the specific standard expected by others in their profession. This leads to a failure to provide a reasonable duty of care as a professional, resulting in harm or injury to a client or customer. Examples include an accountant filling out a tax form incorrectly or a lawyer giving poor advice.
In legal settlements, compensatory damages are intended to recompense a victim for the wrong they have experienced. Punitive damages are meant to deter others in the same field from making the same mistake because they inflate the costs of making that mistake.

Mark Fairlie contributed to this article. 

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Kimberlee Leonard, Senior Analyst & Expert on Business Operations
Kimberlee Leonard is an insurance expert who guides business owners through the complicated world of business insurance. A former State Farm agency owner herself, Leonard started her decades-long career as a financial consultant advising on investment strategies before switching her focus to insurance and risk mitigation for businesses. Leonard has developed insurance primers on everything from small business insurance costs to specific policies, such as excess liability insurance. She has also reviewed business software tools, analyzed employee retirement plan providers and continues to share insights on financial topics as they relate to business. Leonard's work has been published in Forbes, U.S. News and World Report, Fortune, Newsweek and other respected outlets.
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