Even if you’re an expert in your industry, mistakes happen. If your client or customer thinks an error in your professional services caused a financial loss, they might sue you. Professional liability insurance is a type of business insurance that provides coverage for professionals and businesses to protect against negligence claims from clients.
It can be challenging to find suitable types of insurance to meet all your business’ needs and have adequate coverage. The right policies depend on your company and the industry’s types of risks. Big and small companies both face liability risks, but the type of liability can change based on what your company does.
What Is Professional Liability Insurance?
Professional liability insurance typically covers negligence, copyright infringement, personal injury, and more. Professionals who have expertise in a specific area require this type of insurance because general liability insurance policies do not offer protection against claims arising out of business or professional practices such as negligence, malpractice, or misrepresentation.
You should consider professional liability insurance if your business provides:
- A professional service
- Regular professional advice provided directly to clients
- Contractual services
When looking for the right professional liability insurance policies, there are several factors and attributes that play a role in determining the cost:
- Location – Higher premiums can be expected if you work in an area with high claim rates, high legal costs, or large populations.
- Number of employees – A large number of employees brings additional risk. The more employees, the greater the odds of a mistake occurring.
- Years in business – For startup businesses, the cost of coverage tends to be higher. As a business gains experience, insurance costs should decrease.
- Coverage limits – The amount of coverage selected affects the policy rate. More coverage typically means higher premiums.
How Does Professional Liability Insurance Work?
Professional liability insurance policies are usually arranged on a claims-made basis, which means coverage is good only for claims made during the policy period. Typical professional liability policies will indemnify the insured against loss arising from any claims made as a result of any covered error, omission, or negligent act committed by the insured’s professional business.
Most businesses require general liability insurance policies. That type of insurance protects against common business risks, but it doesn’t cover claims of professional mistakes. Professional liability insurance fills in those gaps. However, it doesn’t cover these types of claims:
- Bodily injury or property damage
- Work-related injuries or illnesses
- Data breach
Complete Insurance Coverage with Biscayne
Any business that sells a professional service or gives advice should consider professional liability insurance to protect against potential lawsuits. It’s vital you should obtain comprehensive insurance coverage to prevent any revenue loss and to withstand any unforeseeable mistakes.
With Biscayne Risk & Insurance Group, we can help assess the risks with your business and find the right policies to meet your needs. No matter the industry, we ensure you and your employees are covered and protected. Contact us today to get started on a customized insurance plan.