As a business owner or professional, you should understand the type of business insurance coverage you need to protect your business. As a business owner, you have lots of ways that your business can be at risk of being sued. If you own a business that offers a service to clients instead of a physical product, you should carry professional liability insurance.
1. Professional Liability Insurance Is Different Than General Liability Insurance
As a business owner, you may already be carrying general liability insurance. General liability insurance is designed to protect you against claims related to things such as bodily injury, property damage, and product liability. General liability insurance can also protect you against advertising injuries such as claims of either slander or copyright infringement due to your advertising methods.
Professional liability insurance covers a very different array of things for which someone could take legal action against your business. Professional liability insurance is designed to cover lawsuits related to clients taking legal action for claims of substandard work your business did that cost their business money.
2. Professional Liability Insurance Covers a Wide Range of Service-Related Issues
Professional liability coverage, also referred to as errors and omissions (E&O) insurance, is designed to cover lawsuits related to errors or work that your business produces that are below the standards you promised to a client.
This covers a wide range of issues, such as errors or oversights in work, whether intentional or not. It can cover services not delivered or services not completed. It can include things such as missing deadlines on a project or breaching a contract. It covers situations where your business is accessed of negligence in your work.
Professional liability insurance will cover your legal costs if you are sued for one of the situations above. This type of insurance can save your business.
3. Professional Liability Insurance Is for Businesses That Deliver a Service
Not all businesses need professional liability services. In most states, professional liability insurance is only required for individuals in the legal and medical professions. However, that doesn't mean that other professions shouldn't carry professional liability insurance.
For many professions, where you are providing a service, your business would be better protected with professional liability insurance. For example, any type of consultant, accountant, auditor, or real estate agent would be good examples of businesses where professional liability insurance would be a wise investment.
If you deliver a service to customers, you should consider carrying professional liability insurance, which can protect you from being sued for breaching contracts, missing deadlines, and having errors in your work. Talk to your insurance agent today to see if this type of coverage is necessary for your line of work.