How the Definition of Professional Liability Varies by State

A profession, in its most general term, is a “calling requiring specialized knowledge and often long and intensive academic preparation.” When it comes to determining your client’s Professional Liability Insurance Coverage needs, however, this term needs to be less vague, as the rules of professional liability vary from state to state. For example, when it comes to medical malpractice, doctors and other healthcare providers are held to a certain standard of care; however the exact definition of this will be different from one state to another.

As business specializations grow and as laws change, the true definition of a “professional” has broadened considerably, and has required different jurisdictions to approach professional liability cases in varied ways. North Carolina courts, for example, consider numerous factors when deciding if an individual is a true “professional,” such as:

• Whether or not a board is enforcing an ethical standard on the profession,
• If a license or special education is required to be in the profession,
• Whether the “professional” provided their services to a specific person or entity for their own use; and
• If general statutes indicate that a certain activity is in fact a “professional” one.

When it comes to professional liability cases in the North Carolina jurisdiction, professionals can’t be sued more than 4 years after a claim accrues due to a special Statute of Limitations in the state. They also cannot be sued under certain consumer protection statutes. For instance, the statue entitled Unfair and Deceptive Trade Practices would not apply to a North Carolina professional, because they would not be considered to be “in commerce.”

If you or your clients are unsure of the rules and regulations pertaining to your jurisdiction, it is imperative to check with the appropriate legal counsel. At PLRisk Advisors, we understand the unique Professional Liability Risks, or Errors and Omissions exposures, that your clients face on a daily basis. While being prepared and diligent can help your clients reduce their risks, it’s vital that they be financially protected with the right insurance policy. For more information about our products and the professions we serve, please contact us today at (855) 403-5982.