As a business owner, you know that you require a certain level of insurance. There are some insurance policies that you need and then there are some that can save your business.
Most businesses buy commercial property, liability, and auto insurance. Others add cyber liability, employment practices liability, and even crime coverage. But not many business owners consider professional liability coverage as part of their risk management plan.
Professional Liability, also known as error and omissions insurance, is a type of liability insurance that is designed to protect professionals from liability incurred as a result of errors and omissions in performing their services. It was organically designed for physicians, architects, engineers, accountants, lawyers, real estate agents, and business consultants.
But today, professional liability is a risk that many businesses have, but may not manage.
If you give any advice, suggest a course of action, or use your professional experience on behalf of your clients, you face the potential of having a professional liability claim. These kinds of accusations can lead to expensive lawsuits.
As the owner or manager of a small or large business, you must understand the unique risks you face and the insurance coverage you require to protect yourself against these risks.
Typically, general liability insurance covers third-party losses from; bodily injury, property damage, product liability, and advertising injury. Professional liability goes beyond that.
Where Professional Claims Can Come From
Errors or omissions at work.
Failure to perform services as agreed to.
Services that have not been delivered.
Deadlines were missed.
Overruns on the budget
Work that is incomplete
Contractual breaches and allegations of negligence
Who Needs Professional Liability?
Of course, we all know, who, the traditional businesses are that need professional liability insurance are; lawyers, doctors, etc. But what are some of the businesses that have a professional risk that you might not have considered?
Web design business
How Professional Liability Can Save Your Business
We live in a society that is extremely litigious. Lawsuits can be filed even if they have no merit. In some cases, legal claims are filed in an attempt to reach an agreement without having to go to court.
If a claim is filed against you, you may still be required to pay the legal fees associated with your case. Those costs would be covered by professional liability insurance.
It pays for your defense
The cost of professional liability claims can run in the tens of thousands of dollars. Having an insurer behind you to fund your defense can save your business.
It gives you peace of mind
Even the most cautious and diligent of us can become the target of a liability claim. Having adequate coverage can provide you with peace of mind and enable you to serve your clients better.
One of the most important aspects of having professional liability insurance is the possibility of errors and mistakes. Professional liability insurance can cover errors as long as they are unintentional and there is no criminal intent.
Out-of-court settlements can be covered by professional liability insurance
Even if a case is settled out of court, professional liability insurance will cover the costs of an out-of-court settlement.
It has the potential to protect your company’s good name
When confronted with a professional liability claim, a professional's reputation can suffer significant damage. Having professional liability insurance shows that you value your reputation and are willing to defend it.
It can cover a wide range of occurrences, actions, and claims
Professional liability coverage will protect the business against a wide range of claims, including negligence, misrepresentations, incorrect advice, and even failing to act in good faith.
Professional liability insurance offers the coverage your business may need to keep open for years to come.
The reality is that no matter how careful you are; errors cannot be completely avoided. Any negligence on your part may result in substantial fines if you are found liable in court. As a result, the next best thing to do is to prepare for future litigation. How? By obtaining professional liability insurance.
If you pay over $150,000 for your insurance premiums every year, a group captive insurance program can cut your premiums in half. Download our free guide today!
Leap | Carpenter | Kemps Insurance Agency
Your custom insurance package needs to be monitored by someone throughout the year to ensure that it always matches your business requirements. That someone doesn’t need to be on your in-house team. That someone can be your Leap | Carpenter | Kemps Insurance Agency independent insurance agent.
Pedro Ponce is a Commercial Insurance & Risk Advisor who has been representing his customers for over ten years. He holds a Certified Insurance Counselor designation and is currently working on becoming a Certified Risk Manager.
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Leap | Carpenter | Kemps Insurance Agency provides Commercial Business Insurance, Employee Benefits, Life and Health Insurance, and Personal Insurance to all of California, including Merced, Atwater, Los Banos, Mariposa, Madera, Fresno, Modesto, Turlock, and Stockton.
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