Professional Liability Insurance
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According to the U.S. Small Business Administration (SBA) Office of Advocacy, there are 641,025 small-scale businesses in Arizona in 2022. They comprise 99.5% of businesses within the state. Small companies have created just 303,760 new jobs to Arizona the economy. They are a key driver for economic growth.
The top five industries in Arizona include:
- Health Care and Social Assistance
- Accommodation and Food Services
- Professional, Scientific and Technical Services
As Arizona expands, more small businesses begin to profit from the booming economy. A lot of them will require insurance to ensure their company is protected. One way businesses can help safeguard their investment in the Copper State is through Professional Liability insurance.
What is Professional Liability insurance?
Increasing competition means clients are becoming harder to be satisfied with the products and services they receive. Regardless of how meticulous you are when completing your task, even small errors could lead to a dispute and consequently a claim. Customers can also be subject to liability if you give advice or perform tasks.
Also known as Errors and Omissions (E&O) insurance, this type of policy protects your business against claims of negligence, misrepresentations, or mistakes. Professional Liability claims are typically made by clients who allege some form of financial damage as a result of your services, products or employees.
You could face a lawsuit if a product that you created doesn’t work or your advice causes financial losses to the customer. The lawsuit could claim that there was a mistake in the design or the product wasn’t up to par with. But if you are covered with Professional Liability insurance in Arizona the individual as well as your company will be shielded from claims by third parties that result from an error in professional practice or negligence.
What does Professional Liability insurance cover?
Even if the claim is proven to be untrue, costs for legal and court costs alone could amount to thousands of dollars. Small-scale business owners could feel the financial impact on their company. In addition, business closures and bankruptcy can result from claims for liability.
Professional Liability insurance typically covers:
- Legal Fees Legal fees – Hiring a an experienced legal professional can be costly. In reality, the majority of lawyers charge on an hourly basis.
- Court expenses – Including filing documentation in the courthouse, underwriting charges, administrative costs, and any other expenses.
- Settlements: If your client agrees in writing that they will settle the matter outside of the court system, you could be spared from a long and lengthy litigation process. But, you will still have the obligation to pay a fee, depending on what your attorney advises.
- Judgments You’ll need to pay the amount of the court if the case goes to trial.
Importantly, Professional Liability insurance in Arizona covers even if you’re not at fault. Baseless claims can be just as expensive to resolve as those that do have merit. You can protect your business and your professional reputation by purchasing an insurance policy for Professional Liability. This will cover you for the cost of settling these costs.
What isn’t covered?
Professional Liability insurance protects many types of businesses from common risk exposures they may face. It is important to understand that this insurance does not cover everything. Other forms of coverage may be required for certain events, such as:
- Damage to your commercial premises or property
- Damage to client property or property of third parties
- Workers’ work-related injury and illnesses
- Third party injuries that occur on your premises
- Business interruptions
BizInsure also offers coverage to help protect your company from the risks mentioned above and more. Arizona small business owners might also want to consider General Liability, Workers’ Compensation, and a Business Owner’s Policy to better protect them against a wide array of exposures that may affect their company.
Who may need Professional Liability insurance in Arizona?
Professional Liability insurance is for companies and individuals that offer professional services, such as designing solutions, giving clients guidance, providing educated suggestions or those who serve the interests of others.
Professions that may require Professional Liability insurance in Arizona include but aren’t limited to:
|Home Care Providers and Businesses||Yoga Instructors|
An Arizona Professional Liability policy can benefit a wide range of occupations and professions. You might want to think about a policy that protects you and your business in the event that your company provides advice or services to others, representing their interests or engaging in other activities that could lead to liability claims.
Is Professional Liability insurance required in Arizona?
Professional associations may require members to have minimum levels of Professional Liability insurance to become licensed or work in the field. Learn more information about Professional Liability insurance requirements by visiting the website for the professional associations to which to which you are a member.
Clients might also require you to have Professional Liability insurance to work with them. It is usually written into a business contract. There is a chance that you require proof of insurance before you sign the contract or begin working on the project.
It’s still a good idea to maintain a Professional Liability policy even though you’re not required to. Without it you will likely need to pay any claims for liability out of your own pocket, which could be financially devastating for your personal and business savings too.
What is the price of Professional Liability insurance?
In Arizona, the average cost for Professional Liability insurance is approximately $669 per year. The cost of Professional Liability insurance in Arkansas is subject to a wide range of variations. Every Professional Liability policy is designed to cover a specific type of business, so prices vary.
Insurance companies employ a range of elements to determine how much you typically be charged to cover Professional Liability insurance (commonly called the “premium”). The following factors will influence the cost of the Professional Liability insurance Premium:
- Your business’s nature and the risk you are taking – Like any other kind of insurance, greater risks will result in more expensive premiums.
- The size and turnover your company’s turnover and size. More complex projects, or higher volumes of work, increase your risk.
- The individuals being covered – The person’s abilities or ability to carry out their duties, as well as whether any claims have been filed against the person.
- Your industry
- The history of previous claims
- The insurance coverage that is required
You’ll require a specific insurance to meet the requirements of specialists in your field. Professional Liability insurance can provide the critical security you require.
Is Professional coverage included in a General Liability policy?
No, General Liability covers bodily injury and property loss that are suffered by vendors, customers and other parties. Professional Liability covers accidents, missed deadlines, or any other incidents connected to your service.
Recommended reading: General Liability vs. Professional Liability insurance
Learn more about Professional Liability insurance in the states where you work.
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