What is Professional Liability Insurance?
There are more than 604,000 small businesses in Maryland, making up 99.5% of all businesses in the state, according to data from the U.S. Small Business Administration.
Many of these small businesses provide their clients and customers with professional services or advice. No matter how careful someone is, there is always a chance that a mistake could be made. Even if it’s a small error or an innocent oversight, it could still lead to a legal dispute. That’s why small business owners should consider purchasing Professional Liability insurance in Maryland.
Also referred to as Errors and Omissions (E&O) Insurance, Professional Liability insurance protects your business against claims of negligence, misrepresentation or mistake. Professional Liability claims are typically made by clients who allege some form of financial damage as a result of your services, products or employees.
For example, you provide a customer with professional advice that causes them to lose money. The customer decides to bring a lawsuit against your company as a result. A Professional Liability insurance policy can help cover the legal expenses of the court case and judgement.
What does Professional Liability Insurance cover
Professional Liability Insurance in Maryland helps protect your business against both actual and alleged claims of errors and omissions that may have occurred while providing professional services. This often includes:
- Attorney Fees – The cost of hiring an attorney to defend your business in court.
- Court Expenses – Any administrative costs associated with your legal case, such as filing documents with the courts.
- Settlements or Judgements – The amount you pay to your client, either by settling out of court or by order of a judge.
Who needs Professional Liability Insurance?
If you are a professional or own a business that provides customers with expert advice, then you should have Professional Liability insurance in Maryland. This includes making recommendations drawn from your expertise and representing the interests of others.
Professional Liability insurance can help shield your professional reputation, as well as protect your business (and even personal) financial assets. Even an unjustified claim or court case can cost a small business hundreds of thousands of dollars. Professional Liability insurance covers this, so you’re not left out of pocket or bankrupted.
Some professions that should consider Professional Liability insurance include:
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How much does Professional Liability Insurance cost in Maryland
The yearly cost of Professional Liability insurance for small businesses in Maryland will depend on factors such as:
- Your industry or occupation
- The size of your business and employee turnover
- How much insurance cover you need
- Your claims history