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What is Professional Liability Insurance?

Professional liability insurance, also known as errors and omissions (E&O) insurance or indemnity insurance, is a type of insurance coverage that helps protect your business if sued for negligence or professional errors.  Professional liability insurance is often one of the first policies a small business owner considers and is one of the most important insurance coverages, especially for businesses that provide professional services or offer advice.  This coverage helps protect the business from financial losses in the event of a claim.

What does Professional Liability Insurance Cover?

Professional liability insurance typically covers the following types of claims:

  • Errors: Includes claims for damages caused by the business making a professional mistake.
  • Omissions: Includes claims for damages caused by the professional failing to do something that they should have done.
  • Negligence: Includes claims for damages that are caused by the professional’s failure to act.

Who Needs Professional Liability Insurance?

In some cases, carrying professional liability insurance may be required. Healthcare providers, insurance agents and real estate professionals are examples of business types that could require professional liability insurance[1].  Professionals of all types, however, should consider this coverage – especially those that work in higher risk fields like lawyers and accountants. These businesses can be more likely to be sued for negligence or errors, and professional liability insurance can help to protect them from significant financial losses.

 

How Much Does Professional Liability Insurance Cost?

The cost of professional liability insurance can vary depending on a number of different factors, including the type of business, its size, and more. According to Progressive, a leader in small business insurance, their customers pay an average of $57 per month for this coverage[2].  Like other small business insurance coverages, you should consider speaking with an insurance professional to see how professional liability insurance can help protect your business.

 

Why Do You Need Professional Liability Insurance?

There are many reasons why your business may require professional liability insurance. They include:

  • Protect your assets: If your business is sued, professional liability insurance can help you protect your assets.
  • Avoid bankruptcy: If you are sued and do not have professional liability insurance, you may be forced to declare bankruptcy.
  • Maintain your professional license: In some states, professionals are required to have professional liability insurance.
  • Protect your reputation: If your business is sued, the reputation of your business could be damaged.

Professional liability insurance is an important type of insurance for professionals of all types. In some cases this coverage is required, while other times your business should simply consider it.  Because It can help to protect you from financial losses if you are sued for negligence or errors. If you are considering purchasing professional liability insurance, be sure to compare rates from several different insurers to get the best possible deal.

Get a Professional Liability Quote

It is important to work with an insurance expert to make sure you get the right liability insurance for your business. At BuyLiability.com, we’ve ranked the best professional liability insurance providers to help you find the best coverage for your Small Business.

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[1] https://www.insureon.com/small-business-insurance/professional-liability/requirements

[2] https://www.progressivecommercial.com/business-insurance/professional-liability-insurance/professional-liability-insurance-cost/

 

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