Professional Liability Insurance
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Professional Liability insurance from Small Businesses in Alaska
According to the U.S. Small Business Administration (SBA) Office of Advocacy, there are 74,587 small-scale businesses in Alaska in 2022. They make up 99.8% of businesses within the state. Small businesses have contributed more than 21,723 new jobs to the state’s economy. They are therefore a key driver of Alaska’s economic growth.
Alaska’ top five industries are:
- Health Care and Social Assistance
- Accommodation and Food Services
- Professional, Scientific and Technical Services
As The Last Frontier grows and more small businesses are able to take advantage of the booming economy. A lot of them will need to ensure that their business is secure. Businesses can safeguard their work by securing Professional Liability Insurance.
What is Professional Liability insurance?
Customers are becoming more difficult to please because of the increased competition. No matter how meticulous you may be in completing your work on time, mistakes could quickly turn into a dispute that could lead to a claim. Each time you offer clients advice or accept work with them, you accidentally take on exposure to liability, too.
Professional Liability insurance can protect professional service providers from potentially devastating financial damages resulting from alleged negligence or error in the delivery of your services. Customers typically file claims for Professional Liability when they assert financial damage due to your services, products, employees.
If a product you have created fails to function or your advice has resulted in an economic loss to the client, you may be the victim of an action for liability. It could be argued that there was an error that you made or that your work was not up to par. But, Professional Liability insurance in Alaska can provide protection for your company from lawsuits brought by third parties caused by professional negligence or errors.
What does Professional Liability insurance cover?
Even if the claim is proven to be untrue, costs for legal and court costs can add up to thousands of dollars. Owners of small businesses could feel the financial impact on their company. The liability claims could lead to bankruptcy, or even the closing of a company in extreme instances.
Based on what kind of insurance you choose and the limit you agree to in the insurance contract Professional Liability insurance could help you save on:
- Legal Costs It’s not cheap to get competent legal representation. Most lawyers charge an hourly fee.
- Court costs includes filing documents with the court as well as underwriting charges.
- Settlements It is possible to avoid drawn out litigation. But, based on your attorney’s advice it is still necessary to make a payment.
- Judgments – On the other hand should your case go to trial and is found in favor of the plaintiff you’ll be required to pay the amount determined by the judge.
It is important to note that Professional Liability insurance Alaska protects you even though you aren’t the cause. Unfounded claims can cost as much to resolve as meritorious ones. A Professional Liability insurance policy can help you defend your reputation and business by paying the above and ensures that you’re not with a huge bill for these expenses.
What is not covered?
Professional Liability insurance protects many different companies from the typical risk-related risks they could face. It is important to be aware that these policies do not cover every risk your business might face. It may be necessary to search for insurance that covers certain events in different ways, like:
- Damage to property or loss of commercial property
- Damage to client property or property belonging to third parties
- Injury or illness related to work for employees
- Your premises may be the victim of third party injuries
- Business interruptions
BizInsure offers additional forms of insurance that can help your business protect against the risk factors mentioned above and more. Alaska small-scale business owners may want to look into General Liability, Workers’ Compensation and a Business Owner’s Policy for greater protection against a range of potential exposures that could affect their business.
Who needs Professional Liability insurance in Alaska?
Professional Liability insurance protects individuals and businesses who offer professional services. This includes offering solutions, giving advice to clients, making educated recommendations, or representing the interests of others.
Professions that may consider Professional Liability insurance in Alaska include but aren’t limited to:
|Home Care Providers and Businesses||Yoga Instructors|
You can see the benefits of a Professional Liability insurance policy can be beneficial to many professions. It is possible to need a policy to shield your small-scale business from liability claims if you provide advice, services or represent the interests of other people.
Professional Liability insurance requirements for Alaska businesses
Sometimes professional associations require members to carry a minimum amount of Professional Insurance coverage to obtain licensure or work in the field. Learn more about Professional Liability insurance requirements by visiting the websites of any professional associations of which you are a member.
Clients might require Professional Liability insurance to work for them. It is usually included in a contract for business. It is possible that you will be required to provide proof of insurance before signing the contract or beginning work on the project.
Even though you are not legally required to do so, it may be prudent to have a Professional Liability insurance policy. Without it you will likely have to pay for any liability claims from your own pocket, which could be financially damaging to your business and personal savings as well.
What is the cost of Professional Liability insurance?
In Alaska, the average cost of of Professional Liability insurance is approximately is $835 per year. However, the cost is subject to a wide range of variations. Each Professional Liability policy is unique because they are tailored to the unique needs of the small businesses they protect.
The amount that you pay each month for Professional Liability insurance (commonly called the “premium”) is determined by insurance companies based on various factors. Some factors that will determine the price of your Professional Liability insurance cost include:
- The nature of your business and the level of risk involved Similar to any other kind of insurance, the greater the risk, the greater the cost of addressing the risk.
- The volume and size of your company – More projects or more work volume increases your exposure to risk.
- The persons covered – The person being covered’s qualifications or capacity to perform their duties and any prior claims that might have been made against them
- Your business
- The history of your previous claims
- The coverage amount required
Specialists in your field will require specialized coverage to address specific needs. You could be eligible for Professional Liability insurance that will give you the protection you need.
Does Professional Liability insurance come with General Liability?
General Liability covers property damage and bodily injuries sustained by customers and vendors. Professional Liability shields your business from omissions and missed deadlines.
Recommended reading: General Liability insurance Vs. Professional Liability
Learn more about Professional Liability insurance in the states where you work.
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