Professional liability coverage is a type of business insurance that offers protection to small business professionals against claims of negligence made by their clients.
Professional liability insurance can take many names depending on the profession, such as errors and omissions insurance, professional indemnity insurance, medical malpractice insurance.
For website developers, freelancers, real estate brokers, software developers, technology consultants, notaries public, management consultants, and other non-medical professionals doing small businesses, the insurance is referred to as errors and omissions insurance (E&O). For those in the medical industry, it’s referred to as medical malpractice insurance.
The best thing about professional liability is that it goes beyond general liability insurance, which usually covers personal injury, property damage, and bodily injury.
With professional liability coverage, you are covered against losses resulting from errors and omissions. You can also include coverage like the breach of warranty, intellectual property as well as other areas to the main professional liability coverage policy.
Professional liability coverage does not just cover business protection but protects your personal assets as well.
Does My Coverage Include My Workers?
Depending on the type of services you are offering, you can include your employees on your company’s professional liability coverage policy. But, this type of coverage may not fully protect an employee accused of negligence while doing their duties.
We would advise that your workers secure professional liability coverage in their names on top of any coverage you’ve taken for them.
Below you’ll find seven reasons why you need professional liability coverage for your business. Read on and learn more so you can make an informed decision.
1.It Protects Your Income
Even if you are not found guilty of any crime, legal proceedings can cost you a lot of money. The legal process requires a lot of fees that can take a bite into your business working capital, making you enter into debts.
With professional liability coverage, you have the freedom to choose the amount that suits your needs to help cover these costs.
2.It Protects Your Reputation
A good reputation means a lot in a business. A negligence case can seriously harm your company’s name and the image you’ve built for many years.
By having professional liability insurance, people will see that you take your profession seriously and are ready to protect your reputation.
3.It Covers a Wide range of Risks
Professional liability insurance is ideal for a variety of professional services. It covers real estate professionals from losses that come from errors and omissions and covers computer technicians against loss of data when performing their duties.
It is also ideal for legal professionals and financial advisors. Almost everyone who interacts with customers can rely on professional liability coverage.
4.Time
Whether you are guilty or innocent, legal proceedings can take months or even years. This may mean spending a lot of time in discovery and in courts instead of running your business.
Professional liability coverage will enable you to get professional support, so you don’t take time away from running your company to deal with litigation.
5.Breach of Privacy
Today, a lot of clients entrust most of their personal information to professionals. Sometimes a breach of information can happen, leading to legal action taken against such professionals. With professional liability coverage, you can rest assured that you are protected from any claims resulting from a breach of privacy.
6.Mistakes Happen
Another reason why you should have professional liability coverage is that you are bound to make errors and mistakes at times. Professional liability will cover these mistakes as long as they are not intentional and there isn’t any criminal intent.
Besides some large businesses might require you to have professional liability coverage before they award you a contract.
This policy shows your potential clients that you value them, and you can do your business responsibly.
7.Peace of Mind
No matter how careful and diligent you are, you can still face a liability claim. Sometimes lawsuits can be filed without merit. In other instances, legal claims are aimed to get a settlement without going through the court process.
But once a claim is made against your business, you have to pay the legal fees associated with that case. With professional liability coverage, you’ll have peace of mind knowing those costs will be covered.
It is vital to ensure that you and your staff follow the required protocols in your discipline to ensure that you succeed and to avoid unwarranted accusations. Having a professional liability insurance policy will help you remain prepared and protected in case a claim is made against your company.
