What is Professional Liability Insurance?
According to 2020 data from the U.S. Small Businesses Administration, there are over 135,500 small businesses in Hawaii, or 99.3% of all businesses in the state.
Many of Hawaii’s small businesses provide clients and customers with professional services and recommendations. No matter how careful they may be, there’s still a chance that a mistake may be made that causes a client to lose money or suffer some other financial loss. In these cases, small business owners may decide to buy Professional Liability insurance in Hawaii.
A Professional Liability insurance policy (also known as Errors and Omissions or E&O insurance) is an essential policy that protects you and your company in case of a lawsuit due to alleged professional wrongdoing.
What does this mean for small business owners in Hawaii? Imagine, for example, that a product you designed for a customer did not work as intended. This faulty item caused the customer to suffer a financial loss, and they decide to file a lawsuit against your company. Professional Liability insurance can help cover the legal expenses associated with the lawsuit and any settlement or judgement you must pay.
What does Professional Liability Insurance cover
Defending your reputation and business can costs thousands of dollars, even if the customer’s claim is not valid. This could greatly impact or even halt business operations. Professional Liability insurance can help protect you and your business.
Professional Liability Insurance in Hawaii covers:
- Attorney fees – Hiring someone to defend you in court can be expensive.
- Administrative legal fees – Such as the cost of filing documents in court.
- Settlements – An amount agreed upon for claims settled out of court.
- Judgements – Any money or other compensation ordered by a judge.
Who needs Professional Liability Insurance?
Professional Liability insurance often makes sense for businesses and individuals that do one of the following:
- Offer their clients or customers specialized services.
- Give advice that their clients or customers rely on to make decisions.
- Represent the needs of their clients or customers on their behalf.
- Employ people who provide these types of services or advice on behalf of the company.
The following professions (as well as many others) may need professional liability insurance:
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How much does Professional Liability Insurance cost in Hawaii
Professional Liability insurance for small businesses in Hawaii varies greatly. Policies are tailored to meet the needs of the individual or business they cover, and this will affect the overall cost.
Factors that determine your policy premiums include:
- Your industry or occupation, and how risky the job is.
- The size of your business, including how many people you employ.
- The amount of insurance you need.
You will be asked questions regarding the above (and more) to help determine how much your Professional Liability insurance policy will cost.