Professional Liability Insurance
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According to U.S. Small Business Administration (SBA), Office of Advocacy in Maine, there were 151,212 small business as of the year 2022. They comprise 99.2% of all Maine businesses. Small businesses have contributed more than 51,522 new jobs to Maine’s economy. They are therefore a key driver of the state’s economic growth.
The top five industries in The Pine Tree State include:
- Health Care and Social Assistance
- Accommodation and Food Services
- Professional, Scientific and Technical Services
As more and more small businesses take advantage of this booming Maine economy, many will discover that they require a safety net in place to safeguard their expanding enterprise. Professional Liability insurance is a great way to protect the business they are developing.
What is Professional Liability insurance?
Clients are increasingly difficult to please due to the increased competition. No matter how meticulous you are in completing your work punctually, errors could quickly turn into a dispute that could lead to an action. Clients can also be exposed to liability when you provide advice or take on 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.
What does Professional Liability insurance cover?
Even if a claim is baseless the legal costs and court fees alone can run into thousands of dollars. Small-scale business owners could feel the financial impact on their business. In addition the possibility of business closures or bankruptcy can result from liability claims.
You could save as much as depending on the kind of insurance you choose and the amount of coverage in your contract. Professional Liability insurance may be a good option.
- Legal fees – Getting an experienced legal professional isn’t an inexpensive task. Lawyers typically cost an hourly rate.
- Court Expenses including filing documents in the courthouse, underwriting charges as well as administrative costs and other related expenses.
- Settlements If your client agrees not to appear in court, it could help you avoid an expensive and lengthy legal process. However, you will be required to pay a cost based on the recommendations of your lawyer.
- Judgments If your case goes to trial, and the plaintiff prevails, you’ll have to pay the court the amount.
It is important to note that Professional Liability Insurance in Maine covers your losses, even when they’re not at fault. Unfounded claims can cost as much to resolve as meritorious ones. The Professional Liability policy can aid in protecting your business’s reputation and pay the above to ensure that you don’t end up completely out of pocket.
What is not included?
Professional Liability insurance protects companies from the most common risks. But Professional Liability insurance doesn’t cover every risk. Other forms of coverage might be required in specific events.
- Damage to commercial or residential property
- Damage to property belonging to the client or a third party
- Accidents or illnesses that affect employees at work
- Injuries to third parties on your premises
- Business interruptions
BizInsure also offers coverage to help safeguard your company from the risks mentioned above and more. To safeguard your business from a variety of risks that could affect their business, Maine small-business owners may also consider General Liability insurance and Workers’ Compensation.
Who may need Professional Liability insurance in Maine?
Professional Liability insurance covers individuals and businesses who offer professional services. This includes designing solutions, providing advice to clients, making informed recommendations, or defending the interests of other people.
These professions may consider Professional Liability insurance in Maine:
|Home Care Providers and Businesses||Yoga Instructors|
As you can see, there are a variety of occupations and professions that could benefit from Professional Liability policy. You may want to think about a policy that protects you and your business in the event that your small company provides advice or services to other people as well as representing their interests, or performing other tasks which could result in liability claims.
Professional Liability insurance requirements for Maine businesses
Some professional associations require that members carry a minimum Professional Liability coverage to be licensed and work in their field. You can find more information about Professional Liability insurance requirements at any professional association that you are a member of.
Clients might also require Professional Liability insurance in order to collaborate with them. This will typically be included in a contract for business. There is a chance that you require evidence of insurance prior to you sign the contract or start work on your project.
Although you’re not required to, it may be prudent to still have a Professional Liability insurance policy. If you don’t have one, you could have to pay for any claims made against your company. It could be financially disastrous to your personal savings and your business.
How much does Professional Liability insurance cost in Maine?
Maine has a wide range of insurance rates for Professional Liability. Each policy is designed to cover a specific kind of business. The average cost of Professional Liability insurance for The Pine Tree State small businesses is $654 annually.
The amount that you pay each month for Professional Liability insurance (commonly called the “premium”) is calculated by insurance companies using a number of variables. The main factors that determine the cost of your Professional Liability insurance premium include:
- The nature of your business and the level of risk you are taking – Like any other kind of insurance, greater risks will result in higher costs.
- The volume and size of your business – Larger projects or a higher volume of work increases your exposure to risk.
- The persons being covered – The person’s qualifications or suitability to perform their duties, as well as whether any claims have been brought against that person.
- The field that you are in
- Your previous claims history
- The coverage amount needed
As a professional in your field, you will require specialized insurance that is designed to meet specific challenges in your profession. This insurance can give you the essential protection that you may need.
What is the difference between Errors and Omissions and Professional Liability insurance?
Errors and Omissions Insurance is the same thing as Professional Liability insurance. It will protect your company against claims of misrepresentation, mistake, or negligence. It may provide coverage for defense expenses and any settlements or damages that result from the lawsuit.
Recommended reading: Errors and Omissions vs. Professional Liability insurance
Learn more about Professional Liability insurance in the states where you work.
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