Most professionals who carry professional liability insurance know that typical policies exclude intentional misconduct on the part of policyholders. Unfortunately, this provision can leave innocent individuals exposed to professional liability claims for decisions or actions they had no part in. One way professionals can protect against this risk is through innocent insured coverage.
How Innocent Insured Coverage Works
This coverage extends protection to policyholders who were not complicit in the wrongful practices of other policyholders. In the event of a claim, the innocent policyholder, or innocent insured, must prove he or she had no knowledge of the conduct that caused the claim. Some policies require an innocent insured individual to report any wrongdoing they do discover to the insurance company as a show of their innocence.
Benefits of Innocent Insured Coverage
Every professional strives to hire trusted partners and occasionally check on their behavior, but with innocent insured coverage, professionals can worry a little less about these tasks. Instead of being paralyzed by the potential risks of working with someone new or delegating an important responsibility, professionals can focus their energy on more important tasks. If professional liability claims do arise, insured professionals do not have to be punished for the actions of others.
Policyholders should always be careful to understand the requirements and restrictions of innocent insured coverage. When understood and used properly, this coverage can be a powerful resource for most professionals who do not handle all of their important work and decisions alone.