Does Your Employer’s Insurance REALLY Protect You?
July 17, 2024
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Your employer’s Professional Liability Insurance is an umbrella, built to protect you in the event of a claim. But what if that umbrella isn’t built for heavy rain? You don’t want to be in the middle of a lawsuit with an unpredictable client to find out that your employer’s Professional Liability Insurance won’t protect you in this downpour.
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The truth is that most employer-provided policies have gaps that can leave you unprotected when a storm hits. In many cases, employer-provided policy limits might not stretch far enough if you’re in a big legal mess or have significant costs. Or worse, it could even vanish depending on the type of work you were providing, like when you’re volunteering outside of work.
After all, your employer has to focus on covering its bases to shield the company overall rather than just the individual circumstances of its employees. And while they might be doing their best to protect everyone, coverage can fall short in some cases. You might be wondering:
I think my employer offers robust coverage. What risks could I be facing?
Well, let’s think again. A lot of times, there are several scenarios where even the most solid employer-provided policies might leave you in a difficult position. Here’s how:
1. Shared Limits
Employer insurance policies often come with shared limits, meaning the coverage is divided among all employees. Imagine several colleagues facing a big lawsuit that goes over the policy’s limit—each person’s share might not be enough to cover legal costs, leaving you on the hook. It’s like sharing a pizza— when everyone takes a slice, there’s less for you.
2. Legal Representation
Employer insurance usually shares legal resources among all employees. This can lead to conflicts of interest and a lack of personalized support. In legal matters, having dedicated legal counsel who puts your interests first is crucial. But, employer-provided resources may prioritize the company’s interests or are spread too thin, impacting the quality of your defence. This can seriously affect the outcome of legal disputes, leaving you vulnerable to decisions or settlements that don’t fully protect your professional reputation and financial well-being.
3. Policy Lapses
One of the biggest risks with employer-provided insurance is that the policy can lapse or be cancelled without your knowledge. Imagine relying on coverage that suddenly disappears when you need it most. This can happen if your employer forgets to renew the policy, faces financial difficulties, or decides to change providers. The result? You’re left unprotected and scrambling for alternatives.
4. Scope of Employment
Employer policies typically only cover incidents that occur within the scope of your employment. But what if you’re volunteering at a community event or doing freelance work on the side? These activities fall outside your primary job role and are often not covered by your employer’s insurance. For instance, an accountant who volunteers to manage finances for a local charity may not be protected under their employer’s policy if a legal issue arises.
5. Regulatory Complaints for those in Regulated professions
Employer policies usually don’t cover legal costs associated with complaints to regulatory bodies. If a regulatory body questions your professional conduct or if you face allegations of wrongdoing, you might have to bear the legal expenses yourself, which could be expensive and stressful.
Plus, if you’re in a regulated profession, the rules for Professional Liability insurance can be pretty specific. Relying on your employer’s policy might not meet the standards you need to keep your license, which could lead to serious consequences like suspension, fines, and other penalties.
What can I do in this scenario?
When a strong gust of wind turns your employer’s insurance umbrella inside out, you don’t want to be left soaking wet. It’s natural to feel overwhelmed and uncertain about what to do next.
But here’s the good news: insurance is here to help, and you have options. You can take control with an individual insurance policy that will make all the difference in protecting your career. Unlike employer-provided plans, your own Professional Liability Insurance can fill those gaps and can offer solid, personalized coverage that’s designed for your needs.
Here’s how having your own insurance can benefit you:
Comprehensive Coverage
Whether you’re volunteering at a community event or doing freelance work, independent insurance makes sure you’re protected in these situations and more, including regulatory complaints and incidents outside of work.
Flexible Coverage Options
You can choose the coverage limits that suit your needs, so you’re not underinsured. The full limit applies solely to you.
Consistency Across Jobs
If you switch jobs or move to a different province, independent insurance continues to cover you. You don’t have to worry about gaps or being unprotected during transitions—your coverage stays with you.
Security
Whether you’re changing jobs or starting your own business, you can work with your provider to cover both past and future work, ensuring continuous protection.
Coverage Anywhere
You’re covered no matter where you are—on the job, giving private instruction, or even while on vacation. Your insurance will follow you.
Option to Add Additional Insureds
If you offer advice or training outside of work and have an assistant, you can add them to your policy too.
Dedicated Legal Support
Instead of sharing an overwhelmed legal team with everyone at your company, you’ll get funds to access a dedicated lawyer who’s focused on your case. Plus, your policy can connect you with specialized counsel who knows the ins and outs of your industry, rather than a general counsel who can’t provide tailored advice. Personalized defence can make a BIG difference in the outcome.
Investing in your own Professional Liability Insurance ensures peace of mind, providing solid protection for your career whenever unexpected challenges arise.
Okay, I hear you. But how do I find coverage that fills the gaps in my employer’s policies?
Finding the right independent insurance needs careful consideration and the right partner. Here are some steps you can consider taking:
- Evaluate Customizable Plans: Choose plans that you can tailor to your needs. Whether you need extra coverage for specific professional activities or higher limits for peace of mind, customizable insurance plans ensure you get what you need without paying for unnecessary extras.
- Ensure Continued Protection: Look for a policy that offers continuous protection, regardless of job changes or additional professional activities.
- Work With an Insurance Broker: A licensed broker like PROLINK can help you navigate the complexities of insurance coverages, helping you find a policy that suits your specific needs.
At PROLINK, we specialize in providing insurance solutions tailored to professionals like you. Our pooled approach allows us to offer competitive group pricing, making comprehensive coverage affordable without compromising on quality. Plus, we also work closely with associations to understand the unique needs of their members, ensuring that our plans are customizable to fit your specific requirements.
Your career path is a journey through ever-changing weather—sometimes sunny, sometimes stormy. Your employer’s insurance, like an umbrella, can shield you, but it may not withstand the heaviest rains or unexpected gusts. By securing your own Professional Liability Insurance, you’re ensuring you have solid protection tailored to your needs. It’s about being prepared for whatever comes your way, so you can navigate your professional path with confidence and security.
PROLINK’s blog posts are general in nature. They do not take into account your personal objectives or financial situation and are not a substitute for professional advice. The specific terms of your policy will always apply. We bear no responsibility for the accuracy, legality, or timeliness of any external content.