Miscellaneous Professional Liability (MPL) insurance is designed to aid a variety of people who offer their professional services and provides coverage for the insured when he or she is accused of errors and omissions (E&O) while performing their jobs. MPL insurance also provides coverage for negligence in the performance of services where a reasonable standard of care is expected. The bottom line is that every class of E&O client, from patent attorneys to investment advisors can all benefit from having coverage against claims of this nature.
For example, when the housing economy market improved, which then led to an improved lending environment, the impact was quite positive on those particular lines of business and on the overall economy. But as small businesses became more active, there was also a rise in the number of E&O claims, and so a lot of businesspeople saw the need for professional liability coverage as a means of protecting their interests as well as the interests of the company.
Cyber liability concerns and the MPL model
In spite of some of the many recent liability cases against Target and other large corporations, due to their data breaches, and wave upon wave of cyber hacks and cyber theft continued to make headlines, MPL hasn’t seen such a significant amount of litigation that would therefore lead to any significant changes in the willingness or the ability for insurers to write the business, nor does the market seem to be softening up at all.
As we see more and more of these privacy issues springing up, this type of coverage becomes more and more necessary, and could likely have an impact on the market. In fact, moving forward, expect the line between MPL insurance and cyber liability coverage to blur to some degree.
The fact is that, at some point, pretty much everyone is going to need this coverage to combat the insurmountable amount of claims that could likely spring from these unscrupulous practices. One indicator of this is that we’re seeing some of the carriers now offering coverage that’s affordable to the small business owner, which translates to smaller deductibles and smaller minimum premiums.