Professional liability insurance is designed to protect people who are recognized as experts in their field. They are hired for their expertise and offer their services for a fee. Some common examples of people who would need this type of coverage includes the following:
If you own a business which depends on your expertise, you need professional liability insurance. You may be required to have special training, certification, licensure or meet other standards required by the state or your industry.
Professional liability insurance protects your business if you fail to deliver your services or meet a deadline, if you’re negligent or if you make a mistake in your work. Because everyone is human, they can’t always be perfect. The issue arises when your mistake costs the client time or money. If the cost to them is high enough, they may initiate a lawsuit against you.
Even a small business can pay upwards of a $100, 000 in a typical lawsuit. Larger companies may find themselves involved in even more complicated suits which can cost them an exorbitant amount of money.
The cost is minimal to obtain professional liability insurance. In fact, it can cost less than $100 per month. Compared to the cost of a lawsuit, purchasing this type of policy is minimal. Of course, continuous coverage is key to ensuring you’re protected. You need to be covered with a policy in place when the mistake happens as well as when the other party files a claim against you.
To know how much coverage you need, you must figure how much risk your business carries and what a typical mistake would cost a customer. You don’t want to just think about the cost of coverage but the cost to your business if you should have a claim filed against you.
It’s important to note that with this type of insurance you will have to include legal costs in your limits. Legal costs are part of the coverage rather than being in addition to it, which reduces the amount available to pay out your claim in a lawsuit.
If your business relies on your knowledge and expertise, you need to carry professional liability insurance. Protect yourself and your company and contact us today to find out more.