Even within the best business, problems can occur, and mistakes can happen. This can, in some cases, lead to a business being sued – if a customer or client feels they have lost out financially because of something you have done, they can try to recover that money.
If you have professional liability insurance, your business will be kept safe should anything like this happen. You might also see this kind of insurance called professional indemnity insurance or errors and omissions insurance, depending on where you are. Let’s look a little more closely into what it does and why you need it.
What Does Professional Liability Insurance Cover?
Professional liability insurance will cover:
- Claims of negligence
- Claims of misrepresentation
- Claims of inaccurate or poor advice
Even if you aren’t aware of doing anything wrong, someone could still make a claim against you if they feel you have made a mistake that has led them to suffer some kind of loss. If you don’t have professional liability insurance, this would mean that you would have to pay them compensation out of your own pocket if they were successful in their claim, which could be devastating for the business.
Professional liability insurance doesn’t cover everything, however. It won’t, for example, cover any injuries or illnesses, and it won’t cover a data breach. You’ll need different insurance, such as general liability insurance for that. Professional liability insurance is all about covering your business if you offer advice, and that advice leads to a financial loss. If you’re not sure exactly what you need, speak to kbdinsurance.com, and their experts will be able to guide you.
Who Needs Professional Liability Insurance?
Professional liability insurance isn’t necessarily something that all businesses need, although there will be times when it is essential. Mostly it will be down to the business owner to decide whether or not professional liability insurance is something they will require, but in all cases, when you are offering advice and guidance to clients and customers, it will be necessary. Although you might feel it is unlikely anything could go wrong with the advice you offer, there is always a chance, no matter how much of an expert you might be. In that case, it’s far better to have the insurance in place.
In some states, all businesses must have professional liability insurance, no matter what they do or what sector they are in, so make sure you know the rules in your own location.
How Much Does Professional Liability Insurance Cost?
Because there is no one size fits all professional liability insurance cover, and everything you do in your business will need to be considered to find you the best cover, there is no one price either. Some coverage will be less than others, but it’s wise to ensure that whatever package you are buying is going to cover everything you might need it to – having insurance in place that is cheap and won’t help you if you need it is worse than having no insurance at all.
