Professional Liability Insurance
There are many types of liability coverages available from insurance brokers e.g. Cyber liability, Commercial general liability or general liability, products & completed operations liability, professional liability also know as errors and omissions liability, environmental liability.
Although they all sound similar, but you need to select the right product for your business.
How professional liability insurance is different from other types of liability insurance?
Professional liability insurance covers:
The costs of defending a claim brought against you or your business due to your alleged professional negligence. Professional liability coverage is commonly know as errors and omissions insurance.
Professional liability insurance can protect you in the following circumstances where:
- It is alleged that you have made an error in your work or
- It is alleged that you have omitted an important aspect and or element or
- It is alleged that you have provided incomplete or inadequate service
Who needs errors and omissions insurance?
When you and or your business is involved in providing professional services e.g. Financial planning, life & financial services, management consulting, accounting, or legal services and this may include lot more services– errors made by you, improper advice or inadequate work by you can cost your clients.
In turn your clients can sue you and in many cases, you can be held responsible for the financial loss and legal expenses.
There is no universal liability coverage for professionals. Each professions is different risk based on his profession and hence needs different insurance solutions.
You should look for professional liability insurance which is designed for your line of work and your unique business.
How can professional liability coverage help me?
Simple errors can qualify as professional service omissions. Fortunately, errors and omissions insurance can help you out in a number of ways, and in a variety of situations. Here are two main examples:
Professional liability lawsuits can be very costly. If you do not have professional liability coverage you may have to pay for all your legal fees from your pocket, and that can be enough to impair you financially.
Claims brought against professional services businesses are often complex; when your work doesn’t directly cause injury or property damage, there may be more factors at play. This can mean longer, drawn-out proceedings that can drain your bank account quickly.
Professional liability insurance may be able to help cover your defense costs, even when the legal action is groundless.
2. Financial protection
A small error and or omission can be enough to drain your financial well being e.g. you as a life insurance agent fails or misses to complete the necessary information on application or makes a mistake while completing know your client form and it results in financial loss to your client. Your client may demand compensation from you and or your insurer.