Professional Liability Insurance
in New Jersey
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According to the U.S. Small Business Administration (SBA), Office of Advocacy in New Jersey, there were 953,416 small companies as of 2022. They comprise 99.6% of all The Lone Star State business. These small companies have created 361,423 new jobs to the state’s economy. This makes them a key driver for economic growth.
The top five industries in New Jersey for small businesses include:
- Health Care and Social Assistance
- Accommodation and Food Services
- Professional, Scientific and Technical Services
As The Garden State expanding economy continues to grow. small-scale businesses may start to consider ways to protect their business for the long haul. One option is for businesses to look at Professional Liability insurance and how it can protect their business.
What is Professional Liability insurance?
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 Professional Liability insurance cover in New Jersey?
Even if a case appears unfounded, legal fees and court costs could add up to thousands of dollars. For small entrepreneurs the financial burden can also impact their operations. In worst case scenarios a liability claim could lead to bankruptcy and even the closure of a business.
Depending on the type of coverage you choose, and the limit agreed in your insurance contract, Professional Liability insurance may protect your business from:
- Legal fees – Finding a competent legal representation is not an easy task. Lawyers typically charge an hourly fee.
- Court Expenses including filing documents with the court, underwriting charges, administrative costs, and any other costs.
- Settlements – If your client agrees to settle outside of court, you may be able to avoid a lengthy legal process, however you will nevertheless have to pay a fee based on the advice of your attorney.
- Judgments – However, if your case goes to trial and is found in favor of the plaintiff you will be required to settle the sum as determined by the judge.
Something important to take note of is that Professional Liability insurance covers the insured even if they aren’t the cause. Unsubstantiated claims are equally costly to settle as claims that have merit. It is possible to protect your company and professional reputation with a Professional Liability policy.
What isn’t covered?
Professional Liability insurance protects companies from the typical risk risks they could encounter. However, it does not cover every risk that your business may be exposed to. It may be wise to look for coverage that covers events in different ways, such as:
- The commercial property you own or your property
- Property of clients damaged or property of third party
- Work-related injuries or illnesses of employees
- There is a chance that you may suffer injuries to third parties on your premises
- Business interruptions
BizInsure also offers coverage to help protect your business from the risks mentioned above and more. New Jersey small-scale business owners might be interested in General Liability, Workers’ Compensation or an Business Owner’s policy to protect themselves against a broad range of possible exposures.
Who may need Professional Liability insurance?
Professional Liability insurance protects individuals and businesses who offer professional services. This can include offering solutions, giving assistance to clients, providing informed recommendations, or defending the interests of other people.
Below is an example of some of the types of professions who may require Professional Liability insurance:
|Home Care Providers and Businesses||Yoga Instructors|
Take the time to consider a policy to protect yourself and your business if your company provides assistance or advice to other people as well as representing their interests, or engaging in other activities which could result in liability claims.
Do businesses require Professional Liability insurance in New Jersey?
Sometimes professional associations require members to carry minimum levels of insurance coverage in order to obtain licensure or to work in the area. The website for any professional organization you are a member of should provide more information about the Professional Liability insurance requirements, if any.
Some clients might also require Professional Liability insurance in order to collaborate with them. The insurance is usually included in a contract for business and sometimes proof of insurance may be required before you sign the contract.
A Professional Liability may provide peace of mind, even though you aren’t legally required to have one. Without it you may have to pay for any liability claims from your own pocket and this could be financially devastating to your business and personal savings too.
How much does Professional Liability insurance cost in New Jersey?
The cost of a Professional Liability insurance policy can differ greatly. Each policy is unique because they are designed to meet the requirements of small businesses. However, the average cost of Professional Liability policy in New Jersey is approximately $730 per year.
Many elements are utilized by insurance firms to decide how much you will be charged each month for Professional Liability insurance (commonly known as “the “premium”). These are some of the elements that impact the price of Professional Liability insurance premiums.
- The nature of your business and the amount of risk you face – Insurance is expensive regardless of the risk.
- The size of your business and the turnover or larger projects can increase your risk exposure.
- The individuals who are covered – The person’s abilities and qualifications to carry out their duties. If any allegations have been filed against the person in the past.
- Your business
- Your past claims history
- The amount of coverage that is legally required
Is E&O same as Professional Liability insurance?
Errors & Omissions insurance is the same as Professional Liability insurance. The insurance will protect your business from claims of negligence, misrepresentation or error. It could cover the costs of defense, as well as any settlements or damages that are due to the claim.
Continue reading: Professional Liability vs E&O insurance
How to get Professional Liability insurance in New Jersey?
BizInsure makes it easy to compare Professional Liability policies with A-rated U.S. insurance companies. You can get suitable protection for your small business.
Learn more about Professional Liability insurance in the states where you work.
This information is provided as a guide only and may not reflect pricing for your particular business, as individual underwriting criteria will apply.
As with any insurance, coverage will be subject to the terms, conditions and exclusions contained in the policy wording. The information contained on this guide is general only and should not be relied upon as advice. The number of quotes provided varies between products, occupations and other underwriting factors determined by the insurers.