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Five Questions You Should Ask About Professional Liability Insurance

professional liabilityDoes your business provide advice or instructions to others?  Is there a chance your advice or an overlooked detail could lead to financial losses for your customers? You built your business on solid planning and excellent advice, and your customers come to you for your expertise. But no matter how carefully you plan or how experienced you are, you can still make mistakes. Professional liability insurance protects your business in cases like this.

Don’t I already have this in my general business insurance policy?

General liability insurance policies usually only cover direct forms of harm, like personal injuries or property damage. Professional liability insurance offers additional coverage for mistakes and errors made by you or someone at your company. Professional liability insurance is also called professional indemnity insurance (PII), but it’s most commonly known as errors & omissions (E&O).

Who needs professional liability insurance?

While doctors and attorneys may be the first professions that come to mind for this type of insurance, they aren’t the only ones.  You should consider professional liability insurance if your business provides services or advice in areas like:

  • Accounting
  • Beauty or salon services
  • Counseling or therapy
  • Graphic design
  • Information technology (IT)
  • Management or business consulting
  • Personal training
  • Real estate
  • Software development

What does it cover?

Most professional liability insurance policies cover:

  • Negligence: A customer may allege your business made mistakes, gave bad advice, or failed to perform promised services. A professional liability policy covers any resulting settlements and judgments.
  • Legal Fees: Professional liability insurance covers your legal defense costs for lawsuits brought against your company.
  • Services Previously Performed: Depending on the policy you choose, insurance could cover your current, future, and even previous work with one policy. 

How much does it cost?

The exact cost depends on how large your business is, the level of risk it poses, and how much coverage you want. Policies generally have a deductible ranging from $1,000 to $25,000.

How can I learn more?

If you’re interested in professional liability insurance to protect your business, please contact us. Since we represent over 80 insurance companies, we can work with you to find the perfect policy and coverage that meets your needs.