The most obvious duty of the professional liability insurance company to its insured parties is to cover the cost of claims, up to the amount defined in the policy. This means that if a healthcare worker is sued for negligence or malpractice and the court determines an award, the defendant's professional liability insurance will cover his or her indemnity up to the amount determined by the policy. Most policies identify both an amount they will pay per claim, and an aggregate amount for all claims within a given policy year.
It is typical with professional liability insurance for the duty of the insurer to include providing defense for the policyholder in case of a claim being made. The insurance company should pay all of the policyholder's legal fees, whether the lawsuit is won or lost. It is well established in most states through case law that this includes all claims stated in a complaint that "potentially may become one which is within the scope of the policy" (quote from Pennsylvania case law).
Any healthcare worker can obtain professional liability insurance. The level of risk as well as the likely amount of payment on a claim, however, varies widely among healthcare occupations. In general, as you might guess, the level of possible indemnity increases with the amount of direct involvement in and responsibility for patient care.
Two potential types of coverage in a professional liability policy make a big difference in whether a given incident will be covered. Occurrence coverage means that the policy will cover any claim made on an incident that happened while the policy was in force, regardless of when the claim is made. Claims-made coverage means that the policy will cover any claims made during the coverage period. Once the policy is terminated, incidents that happened during the coverage period are no longer covered.
Tail coverage is frequently added to claims-made coverage. Tail coverage is supplementary insurance that extends coverage for incidents that happened while the policy was in effect, but were not brought as claims until after the policy was terminated.