Professionals that operate their own businesses need professional liability insurance in addition to an in-home business or Business Owner’s policy. This protects them against financial losses from lawsuits filed against them by their clients.
Professionals are expected to have extensive technical knowledge or training in their particular area of expertise. They are also expected to perform the services for which they were hired, according to the standards of conduct in their profession. If they fail to use the degree of skill expected of them, they can be held responsible in a court of law for any harm they cause to another person or business. When liability is limited to acts of negligence, professional liability insurance may be called “errors and omissions” liability.
Professional liability insurance is a specialty coverage. Professional liability coverage is not provided under homeowners endorsements, in-home business policies or Business Owner’s policies (BOPs).
Professional liability insurance coverage gives your business protection from the risks you face in delivering your professional services.
You should consider professional liability insurance coverage if your business:
- provides a professional service.
- regularly gives advice to clients.
- is requested by a client to have professional liability insurance to complete a contract.
Professionals that should consider professional liability are:
- accountants or auditors
- public notaries
- medical professionals
- real estate agents and brokers and more.
Professional liability insurance protects small businesses by covering the costs of client lawsuits claiming substandard work. A client may claim your negligence caused them financial harm. And a client that thinks you cost them money may take legal action in hopes of recovering their losses.
Professional liability can cover the costs of lawsuits over:
- Accusations of negligence
- Budget overruns or project delays
- Breach of contract
- Incomplete work
- Missed deadlines
- Undelivered services
- Work errors or oversights
Successfully defending yourself in court can be expensive. Professional liability insurance will cover those costs and help ensure your business stays afloat.
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