What Is Professional Liability Insurance: Professional liability insurance shields businesses as well as professionals against financial losses or lawsuits due to mistakes or omissions that occur in the course of business. Although it’s not required by law in all industries, it could be essential for those who could be the subject of claims of this kind to protect their business and their financial security. Read on to find out more about insurance for professional liability and if you should have it.
What Does Professional Liability Insurance Cover?
Professional liability insurance covers the employees of your company or your company from any claims that arise from mistakes or omissions in the service or advice provided. This can include misrepresentation, negligence and breach of contract and will cover any costs of litigation or settlement. It usually provides protection, and can even be used to pay for legal defense.
What Are the Most Common Situations You Might Need Professional Liability Insurance?
Insurance for professionals is often used in areas where professional mistakes or negligence could be liable for compensation, for example, finance, medicine, and law. However, it is also able to protect businesses in areas like architecture, building engineering, information technology and media that may unintentionally result in financial loss or harm to an uninvolved third person. The main benefit for professional liability insurance is the fact that it shields your business from legal proceedings that could be unexpected or financial losses.
Types of Professional Liability Insurance
“Errors and Omissions” or “E&O” insurance is the most popular kind of professional insurance called liability. This type of insurance will cover you in the event that you commit any errors or omissions when offering advice or services. It is important to note that this kind of protection is only applicable when the error occurred. It is not able to protect against losses resulting from negligence or breach of contract or fraud. Certain professions may require additional insurance, like Professional Indemnity Insurance (PII) along with E&O insurance. This type of insurance safeguards experts in the event their work causes injury or damage to the property of a third person.
Also Read: Everything You Need To Know About Insurance
How Much Does Professional Liability Insurance Cost?
The price in professional liability insurance depends on a variety of factors, such as the nature of the business you operate and the amount of coverage you need. The cost of professional liability insurance ranges between hundreds or a few thousand per year. It is essential to look at different policies to make sure that you have the protection you need at an affordable cost.