Insure Your Future

Professional Liability Insurance And Its Importance

20 May 2020 by Sue Palmer

All businesses have risks that could cost you money, so you need to guard yourself with business insurance. Professional liability insurance can protect you against certain types of negligence claims. In some states, this insurance is required for certain types of businesses. Here is more information about professional liability insurance and its protections.

What Is Professional Liability Insurance?

Professional liability insurance is also known as omissions and errors insurance. It covers you for mistakes, missed deadlines, and misrepresentation claims, among other things. For example, you would be protected if you were a bookkeeper and you made a math error that resulted in a loss to your client or if you were a photographer and lost the only memory card full of a client's wedding photos. Both you and your employees are covered by this insurance.

How Is It Different From General Liability Insurance?

General liability insurance covers direct physical losses related to the actions of you or your employees. For example, it covers you if you are a photographer and someone trips over your equipment. General liability also covers you for injuries caused by a product you use in a salon. You would also be covered if you caused property damage while working on a client's property.

Who Needs Professional Liability Insurance?

Professional liability insurance is recommended for any business that makes a product, provides a direct service, or gives professional advice. While all businesses have some professional liability risk, certain professions are more likely to be sued than others for an error or omission. For example, a real estate agent could suffer losses for a failed deal. A parent could sue a teacher over a classroom incident. Doctors and lawyers could be sued for injuries related to treatment or advice that resulted in injuries or damage.

What Does Professional Liability Insurance Exclude?

Like any other type of insurance, professional liability does not cover intentional harm or illegal acts. Not all errors or omissions are covered; only the ones specifically listed in your policy are covered. Many policies do not cover cybersecurity issues or data breaches. However, you may be able to purchase additional insurance for these issues.

If you own a small business, then consider protecting yourself with professional liability insurance. Professional liability insurance is important if you have any chance of being sued over your product or advice. Having this insurance will give you peace of mind as you perform your work. If you want to know more about this insurance type or any other type of business insurance, then contact an insurance adviser for more information.

To learn more, contact a resource like Welsh Insurance Agency Inc.

Share  

Search