You’re not starting any ordinary small business. You’re building a startup. Your goal is to grow and, in order to do this, you not only need a solid business plan, but also protection for everything that you’re building. Startups are inherently risky, so it is extremely important that you get the right commercial insurance coverage.
Insurance for the First Stages
If you’re in the first, or seed, stage of building your startup you are probably excited – and nervous about everything that’s to come. Maybe you’re not thinking about insurance, or think that it’s something that can wait until you’re further along in the process. Nothing could be further from the truth.
Startups are all about investment, and you need to think of commercial insurance as another investment to grow your business. Without it, you won’t be able to attract the best employees or convince investors that you are serious about your venture and are planning ahead for the long run. Even before you have customers, you should have the following policies:
General Liability – something that all businesses should have, this type of insurance protects you against lawsuits claiming bodily injury or property damage. But did you know it also provides coverage for personal and advertising injury like libel or slander?
Commercial Property – if you’ve got office space, then you need this type of policy to protect everything in it from risks such as fire or theft. There are commercial insurance packages available that will bundle liability and property coverage.
Workers Comp– if your startup has or plans on having employees, be aware that this type of coverage is required by individual states. It covers medical expenses and lost wages for an employee who is injured at work.
Tech E&O vs Cyber Liability
Once you’re past that first stage of getting your initial funding, setting up your space, and hiring your employees, it’s time to start thinking about what happens once you are up and running. Now you have customers, and a whole new set of risks.
The above type of insurance policies apply to all businesses, but you may need some specialized coverage for your startup. If you’re dealing with any kind of tech, as many startups do, there are two types of policies you should look into: tech errors & omissions (E&O) and cyber liability insurance. They may sound similar, but they cover different things.
Tech E&O – If you’re a business selling a physical product, then you need product liability in case a product fails. If you’re a firm offering financial or legal advice, then you need errors & omissions to protect yourself against claims of financial damage. If you’re a tech startup, then you need tech E&O. This type of coverage protects your company in the event that one of your tech-based products fails. If you are developing or licensing software, it is important to note that the insurance industry considers software a service and not a product. Because of this, you will need tech E&O, and not the same type of product liability coverage that might be sufficient for other businesses.
Cyber Liability – There is one very important thing that that tech E&O doesn’t cover: third-party data breaches. 43% of all cyber attacks happen to small businesses. With all the risks of cyber crime today, this type of insurance is essential if you store any kind of customer data.
While tech E&O covers the failure of software, cyber liability covers the loss of private third-party information. Depending on your startup, you may need both to be fully covered.
As You Grow
If your startup is taking off, congratulations! You’re growing, and are probably looking for more investment and taking on a board of directors. In this case, you’ll need another specialized type of coverage: Directors & Officers insurance.
This type of insurance covers both your business and your management, including their personal assets. It covers:
Theft of trade secrets
Misrepresentation, in the case that investors feel they were given misleading information, leading to loss
Wrongful acts, covering anything that managers do in their professional capacity that stakeholders deem “wrongful,” and that results in a loss
Having D&O is important for attracting investors, who will feel more confident placing their trust (and money!) with you if you have comprehensive coverage. Your board members/managers will also feel confident making decisions without risk of personal liability.
Startups are unique among small businesses. They’re riskier, but they have more potential for growth. If you’re one of the few who have the vision and the drive, make sure that you protect everything you’re building. And remember, EZ.Insure is here to help you sort out your commercial insurance needs. We’re unique, too! We want your startup to succeed and will work with you to keep you covered. Our services are always free and nobody will ever hound you with endless calls. You have enough to worry about! To get started simply enter your zip code in the bar above, or you can speak to an agent by calling (855) 694-0047.
If your business is run out of an office, a shop, or any other physical location, then you already have property insurance to protect yourself against the unexpected, right? Fire or theft are very real threats and you would never want to leave your business exposed. But what about the business assets you can’t see: your ideas? If you have patents, trademarks, copyrighted designs, or trade secrets that you want to protect, then you should look into getting intellectual property (IP) insurance. This type of policy can also protect you from an unexpected and very expensive lawsuit.
What Is Intellectual Property?
Copyright protects “original works of authorship,” usually things like writing, music, art, or even software.
Simply put, intellectual property is any work of your own invention or creativity that you own the rights to. Unfortunately, you can’t simply jot something down and claim ownership of it. Your idea usually needs to fall under one of these four legally protected categories:
Patent – used to protect inventive ideas and processes
Copyright – protects “original works of authorship,” usually things like writing, music, art, or even software
Trademark – protects words, phrases, symbols, sounds, even smells and color schemes
Trade Secret – defined as “proprietary procedures, systems, devices, formulas, strategies or other information that is confidential and exclusive to the company using them.” This classification is less formal: the only way to protect trade secrets is to actually treat them like secrets.
What Are the Types of IP Insurance and Why Have Them?
There are two main types of IP insurance, and they each protect your business against different threats or risks:
Enforcement Insurance – some of the most valuable property you have is your own ideas, and you should protect them like a shop owner would protect their stock. In fact, it is estimated that your company’s intellectual property is 80% of its value. If another company steals some of your valuable ideas, this type of coverage will help you fight them with a lawsuit.
Defense Insurance – you should also remember that other companies want to protect their ideas, and they very well may have trademarked, copyrighted, or patented them. They will fight you if they feel you have used any of their intellectual property without permission. This type of policy will help you in case you are faced with a very expensive infringement lawsuit. According to the International Risk Management Institute (IRMI): “The cost of IP litigation can be astronomical, and continues to increase each year. In certain cases, the high stakes of IP litigation can pose a very real threat to the company itself.” When you consider that the cost of an intellectual property lawsuit can run from around $650,000 to more than $5 million, it seems like a good idea to have the peace of mind IP insurance can give you.
If you are interested in protecting your business against both types of risk, there is also a third type of policy, a defense and enforcement policy, which would provide both types of coverage.
Are There Limits to IP Insurance?
As with any type of insurance policy, you will need to find out how much coverage you will get. Some IP insurance carriers will only cover legal fees up to a certain amount. Some policies will only cover you in certain geographical areas.
In addition, if you have an enforcement policy, you will need to be very specific about the patents, copyrights, trademarks, or trade secrets you want to cover. These policies are not blanket insurance for the contents of your head, but will need to have every protected idea you want covered listed. If your intellectual property changes, your policy will also need to change.
If your business is all about ideas, inventiveness or creativity, or if you feel like you’ve got the secrets to success in your field, you may be selling yourself short if you don’t have IP insurance. Also, if you think that your general liability insurance will cover intellectual property infringement because it includes coverage for “personal and advertising injury,” you could find yourself with a very expensive mistake on your hands: these policies only cover infringement if it’s part of your advertising materials. In order to protect both your ideas and your business itself, intellectual property insurance may be the way to go.
If you’re a business owner who works with contractors or hires others to work for you, you’ve probably requested a certificate of insurance (COI). Or perhaps businesses you’ve worked with have requested to see yours. This document serves as proof that a business or contractor is insured. It outlines the types and amounts of coverage, ensuring that you and others are protected against accidents or mistakes. One of the most widely used and recognized forms of a COI is the ACORD certificate. An ACORD certificate is a standardized document that provides proof of insurance coverage, summarizing key details such as policy types, limits, and effective dates in an easy-to-read format. It’s commonly requested in business transactions to confirm adequate liability and property insurance coverage.
What is an ACORD Certificate?
ACORD certificates are governed by the Association for Cooperative Operations Research and Development. This association is a non-profit organization that provides the standardized forms and certificates for almost 90% of US property and casualty insurance carriers. Before ACORD created standardized forms, insurance companies had their own policy forms, which made it confusing for agents and brokers.
With standardized forms, it’s easier for small business owners to review their insurance and prove to customers and partners that they’re insured. If a document meets the ACORD’s standards, it will have “ACORD” stamped on the top left corner of the document. The insurance agency information will be located just below the stamp.
The ACORD 25 form, also known as a certificate of insurance (COI), is a type of liability insurance certificate that provides evidence of liability insurance, such as general liability insurance or professional liability insurance, and is the most commonly requested certificate of insurance.
Tips Involving ACORD Certificates
When you purchase any type of liability insurance, ask your agent for an ACORD certificate so that you can provide it to any client or business partner that you want to work with. Having this certificate provides proof of your coverage shows businesses or clients that working with you that you have sufficient liability protection.
Common ACORD Certificate Categories
ACORD certificates are categorized by numbers. This gives people a better understanding of the specific forms they might send to prospects or receive from contractors. Some of the most popular forms used in the insurance industry are:
Certificate of Liability Insurance (25)
Evidence of Property Insurance (27)
Certificate of Property Insurance (24)
Evidence of Commercial Property Insurance (28)
Additional Remarks (101)
Ask Upfront to See ACORD Certificates
If you are going to work with a contractor or another company, you need to make sure they have their own liability insurance. This will protect your business in the event that they:
The best way to do this is by asking them to send you an ACORD certificate. You should be able to do the same if asked for proof of insurance. When you send an ACORD certificate, it shows that you are responsible, and puts people at ease. With this documentation on hand, individuals and business will be more likely to want to work with you. If your insurance carrier cannot issue ACORD certificates, it might be time to switch to a one who is compliant with your industry standards
Pay Attention to the Details
In addition to confirming proof of an ACORD certificate, it’s vital that you carefully read over the document’s details. ACORD certificates include key insurance information such as expiration dates and coverage limits, which could effect your level of protection. By taking the time to thoroughly examine ACORD certificates, you ensure that your contractor’s policy is up-to-date and provides adequate protection.
It’s also worth mentioning that ACORD certificates are not replacements for an actual insurance policy. While they provide a snapshot of coverage, this documentation doesn’t modify terms of the policy or guarantee coverage. With that said, it’s always wise to request a complete copy of the actually policy. This is especially true if you’re working on a high-risk or high-value project.
Learn More at EZ.Insure
If you want to learn more about ACORD certification, or if you have any other commercial insurance questions, an EZ agent can help! We’ll assess your business’ needs, compare top plans, and find a policy that’s right for you, all in minutes! To get free instant quotes, simply enter your zip code in the bar above, or to speak directly with one of our agents in your area, call (855) 694-0047.
Once your business is up and running, you might come to the realization that you can’t do it all, and you’ll need more help. Instead of hiring a full-time employee to handle some projects, you might opt to go for an independent contractor, vendor, or other third party. This is a great choice for small business owners, to save money and grow your business. When you go this route, it’s important to understand the downfalls if you don’t properly insure independent contractors you hire.
Insurance Options
If you decide to expand your workforce with independent contractors, you might have to upgrade your commercial insurance. If an independent contractor you hire makes a mistake without insurance, you could end up paying a lot of money.. That’s because the client can sue both you and the contractor for financial damages. With all that said, it is important to be protected in these instances. So you have two options:
Hire an insured contractor: If something goes wrong and you are sued, you can sue the contractor and recoup some of your losses. You can check if they have coverage by reviewing their certificate of liability insurance.
Add your independent contractor to your general liability policy as an additional insured: This means that they are covered by your insurance for the duration of the job. Make sure you have the right commercial insurance policies. This means a policy covering temporary staff and independent contractors for any work they perform for you.
Key Benefits of Independent Contractor Insurance
When working with independent contractors, having the appropriate insurance coverage in place can provide critical protection for your company. Here are some major advantages of ensuring your independent contractors are properly insured:
Financial Protection from Lawsuits. If an independent contractor has an accident or makes, getting them insured protects you from major financial losses. Without appropriate insurance, your company may be held liable for damages, legal fees, and compensation. Independent contractor insurance assures that you are not solely responsible for these charges.
Coverage for Errors and Omissions (E&O). Contractor errors and omissions insurance (E&O) protects against claims based on mistakes, negligence, or inability to deliver services as promised. This coverage protects your company against the financial consequences of contractor errors, protecting you from costly legal fights.
Liability Insurance for Third-Party Injuries and Property Damage. When independent contractors are covered under general liability insurance, it provides protection against third-party claims for bodily injuries and property damage. Whether an accident injures a client or damages their property, general liability insurance covers such instances, reducing your financial exposure. You can add a contractor to your policy as an “additional insured.” That way the policy covers accidents, property damage and physical injuries caused by the contractor
Professionalism and Peace of Mind. Contractors with insurance or who are covered by your policy ensure that both parties are protected, providing you with peace of mind. This not only protects your organization, but also strengthens your reputation as a responsible business owner.
Reduces Potential Gabs in Coverage. With an independent contractor add to your policy, you’ll reduce potential gaps in coverage. Doing so is crucial for safeguarding your company against unforeseen liabilities resulting from contractor errors or mishaps.
Professions Where Independent Contractor Insurance is Crucial
Independent contractor insurance is especially crucial for specialists in high-risk industries. These are jobs where liability, property damage, or errors can result in substantial financial losses. Some occupations where this insurance is particularly important include:
Construction Workers and Contractors. Construction projects involve numerous hazards, including property damage and on-site accidents, making liability coverage vital.
Freelance Designers and Developers. Errors in design or software development may result in financial losses for clients, prompting legal action.
Consultants and Business Advisors. Mistakes or oversights in professional advise can have financial or legal ramifications for clients, making professional liability insurance essential.
Real Estate Agents and Brokers. These specialists handle major financial transactions and may face legal ramifications if problems develop during negotiations or closings.
Photographers and Videographers. Misplaced or damaged equipment, missed photos, or liability during events can result in financial loss, hence insurance is essential for these positions.
Compare Quotes
Considering the cost of court fees, medical expenses, and repairs that might arise from negligence or accidents, having the appropriate insurance coverage is less expensive than risking the financial strain of a large liability claim. To save money, compare free quotes with an EZ agent. We’ll provide you with one agent to walk you through the process and find you the best policy available. To get free instant quotes, simply enter your zip code in the bar above, call us at 855-694-0047. No hassle, no obligation.
More and more Americans are leaving their cubicles to work on their own. Well, why not? You decide how to run your business. You decide when to work. Who is on your team is up to you. Those are some great perks. So it’s not surprising that there are 15 million self-employed professionals in the American workforce right now, and that number could nearly triple in the next two years.
But there are some things you can’t control or plan for in business or in life. What if something goes wrong on the construction site and one of your clients gets hurt? Or what if you get hurt in a freak accident and can’t work anymore? Those “what if” questions are enough to turn the dream of a self-employed entrepreneur into a nightmare. So, if you work for yourself, you need insurance to protect yourself, your family, and your business. You’ve worked too hard to leave anything unprotected. But how do you know which types of insurance for self-employed people need and don’t need? Let’s look at types of insurance that will make you feel safe.
Self-Employed Business Insurance
Whether you’re a plumber or a freelance writer, there’s always a chance of something going wrong with your job. Some people are more likely to get hurt on the job, while others may be more likely to be sued. Insurance for self-employed individuals is crucial to cover the risks of your work. Here are the four most important types of business insurance to look into.
Liability insurance will protect you financially in the event that someone sues you for damages after slipping and falling in your coffee shop. Or breaking an expensive vase while cleaning a client’s home. Slander suits are also covered by general liability insurance. This sort of protection is available both as a separate policy and as part of a business owner’s policy.
Listen, we all have our flaws, and everybody messes up sometimes. This is where professional liability comes in handy. It’s insurance that protects you in the event that a client is harmed as a result of a service you provided or advice you gave. It is also known by its more common name, errors and omissions insurance. Professional liability insurance covers financial losses in the event of injury or damage. While general liability insurance covers injuries and damages to property.
A business owner’s policy (BOP) gives your small business protection against a wide range of claims. It does this by combining two types of coverage. Commercial general liability insurance and Commercial property insurance are both parts of its coverage.
The part of a BOP called “general liability” protects your business in case someone makes a claim against you or your business. General liability insurance protects you from lawsuits if something like a customer slipping on a wet floor. Or a faulty product causing damage to a client’s property. Or a claim that your products or services hurt someone. It can also protect you from libel, slander, and certain advertising lawsuits.
The property part of a BOP helps protect the buildings, equipment, furniture. And stock that you own, rent, or lease for your business. It helps pay to fix or replace things that are stolen, broken, or destroyed, even if they don’t belong to you but were in your care. It can also pay for things like rent, payroll, and other bills while your property is being fixed or replaced after a fire or other covered loss.
If you have employees, no matter the nature of your business, you are required by law to carry workers’ compensation insurance. Workers’ compensation insurance, also known as “workers’ comp,” is a mandatory type of coverage that will provide financial support to your staff if they sustain an injury while performing their job duties. It serves as a disability insurance pool that reimburses workers monetarily and/or provides medical care in the event of an illness or injury. If you want to learn more about the workers’ compensation laws in your state, you can visit the state by state guides on our site.
Physical dangers such as injury and property loss are ever-present in the business world. However, there are dangers associated with using technology that could affect your company. Data leaks and hacking are just two examples. Information about customers’ identities or medical histories that you store on company computers is a prime target for hackers. In order to quickly recover from a data breach or cyberattack, it is crucial that your company be covered by data breach or cyber liability insurance.
If you’re in business for yourself, it’s important to have a basic understanding of health insurance. As a first step, you should enroll in a health insurance plan. If you do not have health insurance this year, you could be fined by the government depending on what state you live in. More importantly, you and your loved ones are taking a serious risk if and when a medical emergency arises.
In addition, if you have been relying on your employer to provide health coverage, you may be in for a rude awakening when you compare prices. Since you no longer have an employer to split the cost of health insurance with, you must do so on your own. The good news is that self-employed professionals can reduce their tax liability. The quickest way is by deducting the money they spend on health insurance premiums.
How To Reduce The Cost Of Self-Employed Health Insurance
A high-deductible health plan (HDHP) is a good option for those looking to save money on health insurance premiums. A higher deductible on your health insurance plan means you’ll have to pay more out of pocket for medical care before your policy kicks in. However, the trade-off is cheaper premiums every month.
Opening a health savings account (HSA) is an option with your high-deductible health plan, making it an even better value. The funds built up in a health savings account (HSA) are exempt from federal income tax, allowing you to save tax-free for future medical expenses. It’s a good idea to consult with an EZ agent, who can explain your options and guide you toward a policy that works for your finances and your loved ones. They will assist you in locating competitive rates and suitable protection.
Self-Employed Disability Insurance
If you’re self-employed and become ill or injured and unable to work, disability insurance could help replace some of your lost income. There are both public and private options for disability insurance. The government provides some options, such as the Social Security Administration and some state programs.
When you’re self-employed, you can buy your own disability insurance policy rather than participating in a potentially more expensive group plan through your employer. You may still be eligible for a group policy through your spouse’s employer or a trade group. You may have more options with an individual policy, but the premiums may be higher. Policy features such as the waiting period, riders, and the definition of disability may be up for negotiation.
Short vs Long Term Disability Insurance
Disability coverage comes in two flavors: long term and short term. Long term disability insurance typically has an elimination period of several weeks to months and a benefit period of several years up until retirement. There may be no waiting period or one as long as two weeks before benefits begin with short term disability insurance. Although long term disability insurance that pays out until retirement age is ideal, a short term policy could be worthwhile as well. In general, shorter waiting periods and longer benefits payout periods tend to come with higher premiums.
For an additional premium, you can secure coverage that the insurance provider can’t revoke for any reason (including your failure to pay premiums) with a noncancelable policy. With guaranteed renewable policies, the insurer cannot cancel your coverage. But they can raise your premiums along with other customers in your rating class. Additional riders, such as cost-of-living adjustments (COLA), residual benefits in the event of a partial disability, premium refunds for going claim-free, premium waivers in the event of a disability, and so on, can be purchased for an additional cost.
EZ Can Help
Working independently or as a freelancer allows for more freedom and a better work-life balance. One disadvantage is that you will be responsible for arranging your own insurance. It’s essential that you do this. Since an accident or emergency can cause financial ruin if you don’t have the proper insurance. As a result, self-employed people who don’t have insurance are taking a risk by not doing so. However, EZ can help! We offer free instant quotes on business insurance for the self-employed and we can even help you find the best plans for you. Enter your zip code in the box below or call one of our licensed agents at (855) 694-0047 to get started.
Any business can make mistakes, but companies that offer industry specific expert services or consulting are more vulnerable to negligence claims when they make a mistake. If your company gets sued due to a mistake or misleading information, it could hurt both your reputation and your bottom line. Negligence suits are one of the most common and expensive types of claims companies face. Negligence claims fall under two categories, ordinary, and professional. Knowing the difference between the two can help you avoid a costly lawsuit.
Ordinary Negligence
Ordinary negligence is defined as a failure to use ordinary or normal care. It usually refers to a careless error that has caused harm to others. Ordinary negligence can be filed against any business or even individuals. And it is the basis for all personal injury lawsuits. Because they did not follow the duty of care, a person or business could be held accountable for physical or financial harm caused by the negligent mistake. Four things must be proven to establish ordinary negligence:
Duty of Care
The first thing a plaintiff has to prove is that you had a duty of care toward him or her. This usually means that you have a duty to take reasonable care not to hurt the plaintiff. However, states can change this standard of care by law for certain relationships, like a doctor-patient relationship. Usually, a person owes someone else a duty of reasonable care if they can see how their actions could hurt others. For example, a driver owes a duty of care to everyone else on the road by not texting and driving. A store owes a duty of care to their customers by putting a “Wet Floor” sign over a spill. In personal injury claims, duty of care is almost never disputed because it’s just about proving that there was a duty of care owed to the plaintiff, not whether or not it was broken.
Breach
If the client can prove that you had a duty of care to him or her. The next question is whether or not you broke that duty. A breach happens when someone doesn’t act with the same level of care that a normal person would in the same or similar situation. This is where someone needs to prove that you broke the duty of care. Using the examples above for instance, an ideal person wouldn’t speed or drive while drunk. So, a driver who did either of these things would have broken their duty of care to other people on the road. For businesses you wouldn’t ignore a fall hazard, you’d put up a caution sign or rope the area off. If you do ignore it then you’ve broken the duty of care.
Causation
Next, the complainant must prove that your breach caused him or her harm. That is, the harm would not have happened if you had fulfilled your duty of care. Also, the breach must be the direct cause of the injury. This means that the law must agree that the breach is linked enough to the injury to make you legally responsible.
Damages
The last step is for the plaintiff to prove damages. Lawyers and courts say that negligence without damages is “negligence in the air”. For example, a driver who speeds may be guilty of a crime. But if the violation didn’t hurt anyone else, the state can’t hold him or her responsible for negligence. In personal injury cases, plaintiffs often try to get paid for their medical bills, lost wages, property damage, loss of quality of life, and physical and mental pain and suffering. So, say they slipped on the wet floor but had no injury from the fall. While you caused the fall you didn’t cause any injuries that need compensation.
Professional Negligence
Unlike ordinary negligence, the rules for professional negligence usually only apply to businesses that offer specialized skills and services to their customers or clients. When a professional doesn’t do what they should for their customer or client. This can include not doing a job with the right amount of skill and care, giving bad advice, or not acting quickly enough.
Professional negligence can happen in any job. Such as with doctors, lawyers, accountants, engineers, builders, and other people who provide professional services. Professionals are required by law to do their jobs with a certain amount of skill and care. If they don’t, they could be held responsible for any harm that happens to their patients or clients. There are two common types of professional liability:
Breach of fiduciary duty
When you don’t act in the best interests of your client, you break your fiduciary duty. This can include making bad decisions, not giving important information, not telling the client about conflicts of interest. Or pursuing opportunities meant for the company without telling the client, and using insider or non-public information in a stock market transaction.
For a client to make a legal claim for a fiduciary breach, they have to prove three basic things:
There was a fiduciary relationship and responsibility
A breach happened
The breach caused damages to the client
Misrepresentation
Negligent misrepresentation is when you say something that you should have known wasn’t true but didn’t with the intention that your client will rely on it and suffer losses because of it. Some examples of misrepresentation are making false statements or promises in a contract or overstating the value or quality of goods or services. The misrepresentation doesn’t have to be in writing. It can be verbal. It can also mean not telling your client about all of the facts. There are 5 components to prove a misrepresentation claim:
There was an important comment about a certain product. And the comment led the client to sign the contract or make a decision
You knew that the information wasn’t entirely truthful or that you purposefully did not provide all of the facts
You made the statement or gave the advice with the intention that your client would rely on it to make a decision or enter into a contract
The client did in fact rely on that information
It’s not always easy to tell if a comment was a fact or someone’s opinion. And this can be a point of contention in a misrepresentation case. The court will look at how a reasonable person would have understood the information.
How To Avoid Professional Negligence Claims
If you offer the kinds of professional services that often lead to professional negligence claims. It’s important to be proactive and take steps to lower your risk of being sued. Let’s talk about a few of the best practices that could help you significantly reduce the risk of a lawsuit.
Contracts
Whether it’s a new client or an extension of a project you’re already working on, you should always insist on a clearly written contract that explains the nature and the limits of the job. It’s important to include every detail you can about the job. Having a clear contract will lower the risk of a negligence claim because your exact promises or the possibility of certain portions of the contract may not work out are listed.
Expectations
It’s easy to get carried away when you’re trying to get a client by making promises you’re not entirely sure you can keep. Even if you do have every intention of making it happen, there’s always the possibility of things not panning out. This is also a very easy way for a professional negligence claim to come about. Make sure you give your clients realistic expectations when you speak with them about how things will work out. Make sure to warn them about possible negative outcomes as well. This will help you avoid awkward and possibly expensive situations where your client feels they were cheated and should be compensated.
Communicate
It is very important to have clear communication with your client. If you let them know about problems and changes in a timely manner, they will think you are more responsible, even if the news is often bad. Changes that come up quickly and out of the blue may make the client upset and more likely to sue you for professional negligence. Keep in touch with your clients often. Even if you have nothing new to say, let them know that you are still working on their project and are fully committed to it.
Records
Unfortunately, a lot of cases of professional negligence start with “he said, she said” claims. The best way to deal with this is to keep careful records of all the professional services you provide. Email is always better than the phone for making deals and decisions because you can keep track of what was said and what was agreed upon. If you prefer to do business by phone or in person, record your talks with clients. If you don’t want to do that, get an email confirmation of what was agreed upon so you have a copy of what was said.
Learn
Keeping up with the latest changes in your industry will help protect you from professional negligence claims. Also, it’s important to keep up with changes to the way state rules govern duty of care.
How To Protect Your Business
Even when you’ve done everything to avoid a negligence claim, they can still happen to anyone. That’s why it’s important to be proactive and get ahead of possible claims by having a good risk management plan and the right business insurance to protect you. Professional liability insurance, which is also called “errors and omissions” insurance, will cover these kinds of cases. It will protect you financially from accusations of negligence, malpractice, errors, and omissions that could happen while you’re giving your clients professional services.
When a claim of professional negligence is made, your E&O policy will pay for your legal defense, judgements, and settlements up to the limits of the policy. It’s important to know that professional liability insurance is a “claims-made” coverage. This means that the policy had to be in effect when the event that led to the claim happened and when you told the insurer about the claim. Also, it’s important to remember that professional liability plans have things they won’t cover. One of the most common is when a professional does something illegal or hurts a client on purpose.
Call EZ
In general, all of the big insurance companies offer professional liability insurance. If you already have business insurance, talk to your insurance company about the possibility of adding professional liability to your coverage. But working with an insurance agent is your best bet. The agents at EZ are well-trained and work with some of the best companies in the country. We can look at all your policy choices and work with your budget to make sure your business has all the coverage it needs. If you would like to see quotes online simply enter your zip code in the box above. If you would like to speak to an agent now call 877-670-3538 today to talk to get a free quote.
