What is Professional Liability insurance?
Professional Liability insurance—sometimes called Errors and Omissions (E&O) liability insurance, protects you and your business from bearing the full cost of defending a lawsuit against you pertaining to “negligence” or “failure to perform.” Those who perform services for others can make mistakes, overlook a critical piece of information, forget to do something, misstate a fact, be misunderstood or misinterpreted, misplace something, etc. and have the potential to be sued by clients or other third parties. Significant risks can be mitigated by an affordable Professional Liability insurance policy that can help protect against allegations such as:
- Error, omission, or negligence in providing a service
- Failure to provide a service
- Violation of good faith
- Improper documentation
- Misrepresentation of facts
- Violations of state and federal law
- And others
Who needs Professional Liability insurance?
There are a wide range of occupations that use Professional Liability insurance ranging from consultants and hair stylists to event planners and accountants, and beyond. In today’s hyper litigious world, if you provide a professional service to others for a fee, you have Professional Liability exposure. Professional Liability Insurance often is the most important type of insurance that a company can purchase, as it protects the individuals and the company from potentially catastrophic litigation costs associated with claims relating to negligence or product failure. Many contracts require that you have Professional Liability Insurance and, even when it’s not required, for our prices it’s worth the added peace of mind.
Does professional liability insurance cover frivolous lawsuits?
Yes. Even if your business wasn’t at fault, a client who believes you caused their financial loss might sue you. Professional liability insurance covers your legal expenses even if the lawsuit never makes it to court.
What is the difference between errors and omissions insurance and professional liability insurance?
They are essentially the same thing and are used interchangeably regarding the same product.
Know the difference: General liability insurance vs. professional liability insurance
General liability insurance offers protection if a third party sues you over a physical injury, property damage, or an advertising injury (libel or slander). Professional liability insurance covers you if you are sued by a client who claims you made a professional mistake that resulted in financial loss. Almost every business owner could benefit from general liability insurance. Your type of business will determine if you need a professional liability policy.
How much do professional liability policies cost?
It varies based on a lot of factors including the type of business, size of business, activities conducted and the levels of protection you need.