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Professional liability insurance (sometimes called errors & omission or E&O, professional indemnity, or malpractice insurance) protects individuals in complex professions from the unique risks they might face on the job.
This coverage protects you when your advice or actions could have significant financial or health-related consequences. In fact, even a perception of inadequate services could be enough to lead to a lawsuit, and professional liability insurance is an important safeguard to have in place.
This insurance is for you if you provide professional service and advice that establish high expectations and significant consequences for clients, for example, accountants, doctors, lawyers, and architects. This can be a risk even for 1099 contractors (or non-employees),
There are other professional trades, hair salon workers or painters for example, where this coverage could also be beneficial, although the amount of risk faced and the likelihood of legal action from a dissatisfied customer are low.
Here are a few reasons why you might need professional liability insurance for your business:
You need protection from claims associated with the services you provide, for example, if you are an accountant advising on tax returns or an insurance agent advising on coverage policies.
You need to ensure that you are protected (including legal representation) in case a customer sues you. This would help protect your business and/or personal assets from legal judgement.
Customers may require professional liability insurance coverage to protect their interests and yours.
You need protection from claims associated with the services you provide, for example, if you are an accountant advising on tax returns or an insurance agent advising on coverage policies.
You need to ensure that you are protected (including legal representation) in case a customer sues you. This would help protect your business and/or personal assets from legal judgement.
Customers may require professional liability insurance coverage to protect their interests and yours.
Professional liability insurance covers a wide range of risks your business faces. Here are just a few examples:
An architect may be sued under the claim that there was a miscalculation in the plans she drew for a project.
An investment broker could make a costly clerical error that results in financial loss for the client.
An insurance agent may misclassify a business, resulting in a lack of coverage of an incident for that business.
An architect may be sued under the claim that there was a miscalculation in the plans she drew for a project.
An investment broker could make a costly clerical error that results in financial loss for the client.
An insurance agent may misclassify a business, resulting in a lack of coverage of an incident for that business.
The average annual cost of a professional liability insurance policy can start around $700 for a small business, but coverage costs will vary. Here are a few factors that can influence the price of a professional liability policy for your business:
Although professional liability covers some of the most common business risks, it doesn’t cover everything. Here are just a few other common risks and coverages and why you may need them to protect your business:
A business owner’s policy provides comprehensive coverage by bundling general liability insurance, commercial property insurance, and business income interruption insurance into a single policy. This makes the insurance process easier and more affordable.
Workers’ compensation insurance protects employers and employees, covering financial needs in case of any workplace illness or injury. This insurance is required by law in most states.
A cyber insurance policy protects you against the consequences of a cyber incident, such as data breaches, network security failures, cyber extortion (ex.ransomware), and other cyber attacks.
A commercial auto policy covers vehicles used for business purposes, including cars, trucks, vans, and other vehicles owned or leased by your business.
A general liability policy covers your business from financial losses and/or legal expenses resulting from any injury experienced by a customer or damage caused to your customer’s property.
By now you understand how important it is for your business to be properly insured. What’s next? Call (380) 225-5242 to connect with an experienced insurance agent who understands the nuances of your business and industry.
