Consumer Demands and Professional Liability Insurance Go Hand in Hand
In the modern world, consumers can perform thorough research on thousands of options before deciding where to buy their services. Throughout the research process there are many purchasing considerations and the consumer develops their own ideas about what quality they should expect to receive for the price they’re willing to pay combined with the convenience with which they hope to receive it. When a client purchases a service, they expect that the provider will devote adequate time, skills, and resources to meet their need as they stated they would. Whether the customer has formed expectations that are realistic or not, there are still businesses that do their best to satisfy the paying customer, just to keep their business.
Every day individual professionals and businesses face the challenges and pressures of generating income. During economic downturns the task of producing profits is even more daunting. As a result, many professionals are forced into reaching out for business that they may not have accepted in the past for fear of not making enough revenue. This practice can be risky if the service provider does not have the required resources or skill set to fully meet the client’s needs. While taken on with the best intentions, this can prove to be even more costly in the future if the provider over promises and can not meet client expectations. This is where professional liability insurance comes in. In its most simplistic form, professional liability insurance provides protection for the provider, when the client feels his or her expectations are not met.
A business transaction can be simple or complex and expectations can vary significantly. For example, a short order cook who only wants a quick trim for a cheap price may go to a local barber shop. All that he expects from the barber in return for a nominal fee is that the barber gives him a decent haircut and doesn’t shed blood with unwieldy clippers or razors. However, an actress like Meryl Streep getting ready for the Academy Awards will require a much more sophisticated haircut and perhaps additional premium services such as professional color or even extensions. Instead of a local barber she will likely seek out a highly trained stylist and will pay significantly more for that ‘proven’ stylist’s time, expertise, and creativity. If, by some chance, the local barber convinced Ms. Streep that he could take on her famous tresses and then made a mistake, the Oscar winner’s reputation would suffer which could potentially affect her livelihood.
In this example, the service provider faces different levels of risk with each client’s expected result. The consequences can include the loss of future business, damaged reputation and even the potential for very expensive lawsuits. Professional liability insurance offers service providers a built in defense mechanism against the different levels of expectations; ultimately it helps people protect themselves, and their businesses from the unknowable, subjective nature of client expectations.
BizInsure Guest Blogger: Andrew Silva
Talk to us
Today’s BizInsure offerings are just the beginning. Please take the time to tell us what you think, offer advice, ask questions, give compliments, or make a request…customer feedback defines us. We’re listening. Click here to contact us.