If you’re a business professional, it is crucial to protect yourself from unpredictable circumstances that happen in all service-related industries. And professional liability insurance covers you in the case that a person or another entity files a lawsuit against you. Also, another name for this type of insurance is errors and omissions insurance. And when your business provides services to clients, then you are in danger for liability for malpractice, negligence, poor advice and errors. Furthermore, the insurance cost depends on your professional risk factors.
Protect Your Business From Harmful Lawsuits
In a 2005 report by the Small Business Administration, The Impact of Litigation on Small Business, it states that many small businesses don’t estimate litigation costs into their annual budget. And lawsuits filed against small businesses result in emotional and financial burdens that change the way owners operate their businesses.
Impact of Lawsuits for Business Professionals
As a business professional, you have a personal interest in your business. So when someone files a lawsuit against you, the stress of ongoing litigation can change your attitude toward your clients and negatively affect your career and your entrepreneurial spirit. And allegations against you can destroy your hard-earned business. Furthermore, even if you try to settle the lawsuit before it goes to trial, the opposing party can refuse to negotiate.
The Importance of Liability Insurance for Professionals
And as you can see from the SBA report, it’s essential for all professionals to carry liability insurance. Also, the purpose of professional liability insurance is to cover the cost of litigation brought against you for damages or injuries caused when performing your services. In addition, most policies pay for legal fees, settlement costs and even time lost from operating your business. Insurance liability policies have a deductible, but the cost is minimal compared to the expense of a lawsuit. So talk to a reputable insurance carrier for the best professional liability options for your career security.
Careers That Benefit From Professional Liability Insurance
So this far from a comprehensive list, but it suggests many high-risk careers benefit from liability insurance. And the cost of an insurance policy is worth the protection you receive from risks of negligence, malpractice, damages related to provided services errors and omissions.
- Medical students
- Hospital administrators
- Insurance brokers
Also, although some professionals decide against obtaining a liability policy based on coverage costs, it is a risk that could ultimately jeopardize your business. In addition, some states require professionals to carry liability insurance.
The Most Common Features of a Professional Liability Policy
So to find out about specific liability policy coverage, work with a dedicated insurance agent who can answer all your questions and concerns.
In general, most professional liability insurance protects your assets and covers you or your firm’s liability for negligence and professional errors. And a basic policy usually pays defense costs subject to your policy’s limits and deductibles. Also, some insurance companies provide lawyers who have experience with professional liability claims. In addition, your insurance agent can also explain about exclusions to your policy that can lower the cost of insuring your particular profession or adding endorsements that increase coverage.
Using a Checklist Can Help You Choose the Best Liability Coverage
Even if you think it’s unlikely that you’ll ever be sued, do you want to risk your career on that thought? And paying a liability insurance premium can save you thousands of dollars if you were ever fighting a court case. Also, your insurance agent can help you determine the exact type of insurance you need to protect your professional career.
Professional Liability Checklist
So the following checklist includes questions you should ask your insurance company before choosing a policy.
- Is the insurance company stable?
- What type of coverage do you need for your career?
- What professional services are covered or not covered in the policy?
- Is your business a high-risk or low-risk enterprise?
- What are the coverage limits?
- What are the deductible costs?
- Does the insurance carrier provide claims support services?
- Does the insurance company offer risk management programs and guidance?
- What are the claims handling policies?
- Is the claims manager knowledgeable about your profession?
- What is the scope of coverage?
- Does the insurance company provide legal services and court costs?
- What is the policy coverage for licensing board representation?
- Does coverage extend outside the workplace?
- Can you expand coverage in the future?
- Is there a limit to the number of claims you can file?
- What exclusions can you make to the policy regarding your profession?
- What is your responsibility and guidelines for reporting the circumstances of a claim?
- How flexible is the insurance company in meeting your professional needs?
- And does the insurance company have a license to operate in your state?
Finally, we strongly recommend professional liability insurance for all professionals who offer services, advice or provide solutions to clients. And your security against alleged wrongful acts is our top priority.
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