If you’re a professional who provides a service to clients, like an accountant, attorney, or doctor, you’ll need professional liability insurance. It’s important to be able to protect yourself and your business from any type of wrongdoing or negligence. Professional liability covers your business in areas that general liability does not. The goal is to help professionals and business owners determine if this line of coverage is necessary.
Understanding Professional Liability Insurance
The purpose of professional liability insurance (also known as errors and omissions insurance) is to cover legal defense to protect a client-facing business from claims made by a third party. The main difference between general liability and professional liability is the risks they cover.
General liability insurance will cover physical risks, like bodily injuries or property damage caused by your business’ daily operations. Professional liability covers financial losses resulting from negligence, errors, misrepresentation, or omissions that occur when you provide your services to others.
Who Needs Professional Liability Insurance?
1. Service-Based Professionals:
Professionals who provide advice, consultation, or services such as consultants, lawyers, accountants, architects & more should obtain coverage.
2. Medical and Healthcare Providers:
Doctors, nurses, therapists, and other healthcare professionals should have professional liability to help protect against malpractice claims.
3. Technology Professionals:
IT consultants, software developers, and tech service providers should consider this insurance to cover potential errors in their work when working with clients.
4. Creative Professionals:
This is a necessity for designers, photographers, writers, and other creatives to protect against claims related to intellectual property or service disputes.
5. Real Estate Professionals:
Real estate agents, brokers, and property managers should get coverage to protect against errors in transactions or advice.
Key Scenarios Where Professional Liability Insurance Is Crucial
1. Client Contract Requirements:
Before engaging in a contract, clients may require proof of professional liability insurance.
2. Regulatory and Licensing Requirements:
In certain professions, professional liability insurance is mandated by regulatory bodies or for licensing purposes.
3. High-Risk Professions:
In high-risk professions, like the medical field, the likelihood of claims made is higher, making this coverage essential.
What Professional Liability Insurance Covers
- Attorney’s fees
- Court costs
- Investigator’s bills
- Settlements
- Judgements
Benefits of Professional Liability Insurance
1. Peace of Mind
After obtaining coverage, you can rest knowing your business will be protected against legal disputes that can result in high costs.
2. Reputation Protection
Professional liability insurance can help safeguard your business’ reputation by addressing claims in a quick and professional manner.
3. Business Continuity
This crucial coverage also ensures that legal disputes won’t financially cripple your growing small business.
Conclusion
In service-based industries like medical, technology, creative, and real estate professions, the importance of professional liability insurance cannot be overstated. Even if you believe your risk is minimal, the financial impact of a single claim can be overwhelming, especially for small business owners. It’s crucial to assess your unique needs and consult with an insurance professional to ensure you have the right coverage in place.
Protect your business and your peace of mind with plans tailored specifically to your business. At EZ.Insure, our agents are highly trained and work with the top companies in the nation. We can compare all of your policy options while working with your budget to get your company all the coverage it needs. For a free quote call (866) 792-2602 to be connected directly to one of our agents today.
