What Is Professional Liability Insurance And Do You Need It?: protects businesses and individuals against financial loss or legal action caused by mistakes or omissions made in the course of their business activities. Although this is not legally required in most businesses, it may be a necessary protection for individuals who may face such a claim to maintain their financial stability and business. Read on to learn more about professional liability insurance and whether you need it.
Professional liability insurance protects you, your employees, and/or your company from lawsuits caused by errors or omissions in services or recommendations provided. This may include any legal or settlement costs and may include negligence, misrepresentation or breach of contract. It usually provides security and can pay legal defense costs.
What Are the Most Common Situations You Might Need Professional Liability Insurance?
is most commonly used in industries such as medicine, banking and law where claims for professional negligence or errors are likely to be made. However, it can also help protect companies that inadvertently cause economic or physical harm to a third party, such as in the building, architectural, information technology, engineering and media sectors. The biggest benefit of professional liability insurance is that it protects you from unexpected legal actions or financial damages.
The most common type is called “errors and omissions” or “E&O” insurance. This type of insurance will protect you from liability if you make an error or omission while providing services or advice. However, it is important to emphasize that this type of coverage only applies in cases where an error or omission occurred. Losses caused by negligence, breach of contract or fraud are not covered. Some businesses may require additional insurance in addition to E&O insurance, Such as Professional Indemnity Insurance (PII). Experts are covered by this type of insurance in the event that their work results in damage or loss to a third party.
How Much Does Professional Liability Insurance Cost?
Both the type of business you run and the coverage you need will affect how much professional liability insurance will cost you. The annual cost of can range from a few hundred to several thousand dollars. It’s important to shop around and evaluate multiple plans to make sure you’re getting the coverage you need at a fair price.
