Every business is prone to a mistake even if they are experts in the field. Businessmen/ Professionals who have expertise in a specific area require, this type of insurance. Professional use this insurance to protect themselves against clients’ claims of negligence or malpractice. Professional Liability Insurance protects the service business from the cost of defending negligence lawsuits and other claims of service-related errors. Professional Liability Insurance is for any small business owner, who provides services or makes a living from their expertise.
Professional Liability Insurance helps cover the company if any mistake is made in their professional services. Professional Liability Insurance coverage will help in paying expensive legal defense costs when sued by the client or customer, even no mistake is made by the company. Professional Liability Insurance, coverage is to help services professionals such as accountants, architectures, and real estate agents, who are sued by customers for an alleged mistake or failure to act.
- Professional Liability insurance is also known as Errors and Omissions Insurance( E&O) or Professional Indemnity Insurance.
- Professional Liability Insurance is the Primary type of insurance to help the company protected against lawsuits that claim service-related errors.
- Professional Liability Insurance is unique, specific to each business, the factors that include in policy for impact are a type of business, location, years in business, size of the business, number of employees and clients of the business, and coverage limits.
- Professional Liability Insurance policy is one of the best risk management tools available for business, as there is no better way than having an insurance policy pay off debts or money owed to the client.
What does it cover?
Professional Liability Insurance covers the following aspects
- Professional Liability Insurance helps cover claims of negligence, misrepresentation, inaccurate advice.
- Professional Liability Insurance covers, the business if the business accounting firm makes a clerical error that costs their client thousands of dollars.
- This insurance helps cover when a client sues the company for making losing sales, production, or market after the advice from company employees.
- Professional Liability Insurance covers any claims related to the provision or failure to provide a service.
What it doesn’t cover?
Professional Liability Insurance doesn’t cover everything, the insurance won’t help the business with
- Professional Liability Insurance, won’t help the business with claims of bodily injury or property damage, work-related injuries or illnesses, and data breach, if the business losses confidential or sensitive info about their clients and customers.
- Professional Liability Insurance coverage does not include criminal prosecution, nor all forms of legal liability under civil law.
- Professional Liability Insurance doesn’t cover intentional wrongdoings, false advertising, employment discrimination.
- Illegal actions, any criminally illegal acts by a business, such as violating securities laws or hacking into competitors’ software are not covered by Professional Liability Insurance.
- Professional Liability Insurance doesn’t cover if the employee is under the influence of alcohol or drugs while rendering the services.
Pros of Professional Liability Insurance
- Professional Liability Insurance, has key benefits like group policies, coverage by all the legal liabilities arising out of negligence, omissions, errors while rendering service that causes damage to the property of third-party or injury to third-party itself.
- The policy boundaries can be extended up to a minimum of a year when requested for it.
- Professional Liability Insurance policy helps manage the business and losses better without having to be sued or legally accused of major financial losses, which might lead to the fall of the entire business or their client’s business.
Cons of Professional Liability Insurance
- Professional Liability Insurance coverage is not provided under homeowners’ endorsements, in-home business policies, or business owners’ policy. It only covers claims made during the policy period.
Any type of business needs Professional Liability Insurance. This insurance needs to get by people singing a contract that requires carrying coverage, offer professional services directly to customers, and regularly advises their clients.