If your company depends on your experience to offer professional services to other companies or individuals, your clients will expect you to have extensive training in your field, and your work must meet industry, individual client contract, and state requirements. Otherwise, if your service or advice causes your client(s) to lose money, you can find yourself in court.
Professional Liability Insurance will help you pay for claims and litigation that general liability insurance won't cover, such as when your clients suspect you of:
Services that are substandard
Services that have not been delivered
Good faith and fair dealing have been violated.
Workplace blunders or bad guidance
Our Professional Liability Insurance includes:
- Medical Mal Practice
- Errors & Omissions
- Employment Practice Liability
- Directors and Officers
How professional liability insurance works
Professional liability insurance can be divided into two categories:
1. Claims-made: The policy was in place at the time of the incident and when the case was brought.
2. Occurrence: This policy includes an occurrence that occurs during the coverage period, but you are no longer in the field due to retirement, a career change, or another case.
Only the financial risks up to the policy's maximum are required to be covered by the insurance policy, which usually include:
The cost of defending yourself against the charges
Expenses incurred as a result of a judgment against you
Other fees, such as fines imposed by licensing boards
Keep in mind that non-financial damages, as well as losses caused by dishonest or intentional actions, are not covered. Furthermore, the plans have deductibles ranging from $1,000 to $25,000, depending on your occupation, company size, and risk level.
Does your business really need professional liability insurance?
Professional liability insurance, in the form of medical and legal malpractice, is available in some states for physicians and lawyers. Professional liability insurance can also be beneficial to the following professionals:
Advisers on investments
Consultants of information technology
Professionals in the insurance industry
Consultants of management
Architects are people who design buildings.
Accountants are people who work in the accounting sector.
Engineers are people who work in the field of engineering
Real estate agents and brokers
Professional liability insurance is also recommended for any other occupation where the services or advice can cost the client money.
According to a 2017 report, more than one-in-five companies face problems that could lead to professional liability litigation (such as contract disputes and customer complaints). According to another report, small business cases cost between $3,000 and $150,000 on average.
Even if state laws or your companies do not warrant it, it is a good idea to carry professional liability insurance because of the possible financial consequences of a lawsuit, as well as the potential harm to your company reputation.