Professional Liability and Board Service Coverage
Physicians, lawyers, accountants, architects, and engineers who practice as employees or partners are covered by the firm’s malpractice or errors-and-omissions (E&O) policy. Premiums vary by specialty: a family therapist might pay $300/year for $1M; a surgeon’s premium can clear $60,000/year for the same limit; an OB/GYN’s premium in a high-litigation state can be substantially higher. Settle two things before you sign the employment contract. First, who pays the tail policy — the extended reporting period that covers claims filed after you leave for work you did while there. Medical tails run around twice the final annual premium, so the surgeon above faces a $120,000 exit bill unless the contract assigns it to the employer, a point easy to win at hiring and nearly impossible at departure. Second, whether the limits are shared across the firm, so that one large claim draws down everyone’s coverage. The firm’s policy covers the firm’s work only; anything you do on the side needs its own, and the mechanics of buying it — claims-made triggers, retroactive dates, tails, hammer clauses — are in section “Professional Liability: Errors and Omissions”.
D&O for board service. Sitting on the board of a nonprofit, a portfolio company, or a family business creates personal liability for board decisions. The entity should carry a Directors and Officers (D&O) policy with indemnification language extending to outside directors. Read the policy before accepting the seat: the limit, the Side A coverage (which pays directly to the director when the entity cannot indemnify), the exclusions (insured-vs-insured exclusion in particular, which can bar coverage in disputes between board members and the entity), and the tail-coverage provision. If the entity’s D&O is inadequate or the director’s exposure is large, an individual Outside Directorship Liability (ODL) policy is available through private-client carriers as an additional layer.
Personal Cyber Insurance. Ransomware, social-engineering fraud, account takeover, and online harassment have moved out of the corporate domain and into the personal one. The private-client carriers (Chubb, PURE, AIG PC) offer personal cyber endorsements with $50,000–$250,000 sublimits covering: identity-theft recovery costs, financial loss from wire-transfer fraud (subject to the policy’s reasonableness conditions on verification), ransomware payments on a personally owned device, and online-harassment legal defense. Premium is typically $200–$500/year as an endorsement to a private-client homeowner’s policy. For households with an in-home network of any complexity, family-member exposure to social-engineering attacks, or named-target risk, the endorsement is cheap relative to the realistic loss distribution. The elder-abuse defenses in section “Elder Financial Abuse” address the parallel risk on the customer side.
Kidnap, Ransom, and Extortion. For families with high public profile, named-target exposure, or operations in countries with known K&R risk, a specialty K&R policy through Lloyd’s syndicates (Hiscox, Beazley) covers ransom payments, response-consultant fees, and extortion-related losses. Premium is private and the policy is confidential by design; disclosure of the policy’s existence typically voids coverage. Reserved for a narrow population; not relevant to most readers and listed here for completeness.
Employment Practices Liability (EPLI). For households with full-time domestic staff (housekeeper, nanny, estate manager, chef, security), the employer-employee relationship creates wage-and-hour, harassment, wrongful-termination, and discrimination exposures the homeowner’s policy does not cover. EPLI policies sized at $250,000–$1M run $1,000–$3,000 per year; for full-time staff, treat as standard equipment.