Which type of insurance coverage is designed to protect businesses against claims of negligence?

Professional liability insurance is specifically designed to protect businesses against claims of negligence, especially in the context of professional services. This type of insurance covers legal costs and any settlements or judgments that result from claims made by clients alleging that the service provider failed to meet standard professional care, which resulted in financial loss or other damages.

This coverage is particularly important for professionals such as doctors, lawyers, accountants, and consultants, who could face lawsuits if a client feels that they have not provided adequate service or advice. These claims can arise even if the professional has acted with good intentions but is accused of making errors or omissions in their work.

In contrast, business interruption insurance is focused on income loss due to a business being unable to operate because of a covered peril, such as a natural disaster. Comprehensive auto insurance relates to vehicle coverage and does not address negligence claims against a business. Property insurance covers damage to physical property but does not expend to claims of negligence or professional misconduct. Thus, professional liability insurance is the appropriate coverage for protecting against claims of negligence in a business context.