What is Professional Liability Insurance?
According to the U.S. Small Business Administration (SBA), Louisiana is home to over 450,000 small businesses as of 2019. That’s 99.5% of all businesses operating in the entire state.
Running a small business can be difficult, especially in competitive industries or if you are operating within razor-thin profit margins. The last thing you want is for a mistake or miscommunication to destroy your professional reputation or bankrupt your company.
This is where Professional Liability Insurance can help. Also referred to as Errors and Omissions (E&O) Insurance, this type of insurance provides comprehensive coverage to businesses or individuals who provide expert advice or services.
If a client alleges that your advice or professional services resulted in a financial loss, they can bring a lawsuit against you or your business. Professional Liability insurance safeguards you from these types of claims, whether they are valid or not. This covers instances where a third party claims you made an error or omission in your work, or where they allege you were negligent.
What does Professional Liability Insurance cover
Court costs and legal fees can run into the thousands of dollars. These expenses, plus any settlements or judgements you may also need to pay, can place great financial stress on the business.
Professional Liability Insurance covers legal costs, court expenses, settlements and judgements resulting from customer claims of mistakes, omissions or negligence. So, even if a baseless claim is brought against you or your business, the impact on operations and your finances will be minimized.
To recap, Professional Liability covers:
- Attorney fees
- Court expenses
- Settlements and judgements
The amount that your Professional Liability policy covers depends on how much insurance cover you decide to take.
Who needs Professional Liability Insurance?
There are many occupations that require Professional Liability insurance in order to do business in Louisiana. However, even if it is not legally necessary to have a policy, you may still want one if you:
- Provide a professional service
- Give clients advice based on your expertise
- Make educated recommendations to clients
- Represent the needs of others
Professions that may need Professional Liability Insurance include:
|Home Care Providers and Businesses||Yoga Instructors|
How much does Professional Liability Insurance cost in Louisiana
The cost of Professional Liability insurance in Louisiana will vary. Each policy is different, as they are tailored to the individual or business that it covers.
Factors that help determine the cost of your Professional Liability insurance include:
- The type of business you run or your occupation – Industries and occupations with more risk generally have higher premiums to meet those risks.
- The size of your business – Larger businesses with many employees or a high work volume increases your exposure to risk.
- Who is being covered – How qualified you or your employees are to carry out their role, and if there have been previous claims brought against you.
- Your previous claims history – Businesses or individuals who have made more claims carry a higher risk for insurers.
- The amount of insurance cover you need – More cover generally means higher premiums.
As a professional, you may require cover that is designed to protect you and meet the challenges of your industry. Professional Liability insurance can help provide a safeguard so you can work with confidence.