Professional Liability Insurance
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According to the U.S. Small Business Administration Office of Advocacy, Tennessee has over 652,000 small business. The Volunteer State’s economy is fueled by small businesses which comprise 99.5 percent of businesses. In addition, they added 273,333 net jobs in the year 2022.
Tennessee’s top five industries for small-sized businesses are:
- Accommodation and Food Services
- Health Care and Social Assistance
- Professional, Scientific, and Technical Services
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Whatever field you work in, you’ll be looking to shield your company from risks that are common to professional service businesses. Professional Liability insurance is one option to accomplish this. Insurance policies can safeguard many different professions and businesses from lawsuits that could cause financial damage for your business.
What is Professional Liability insurance?
Professional Liability Insurance in Tennessee is a good option for small businesses that provide professional services to clients or advise them.
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. The most common claim is that the product, service or employees employed by your business cause financial harm to your customers.
For example, imagine you provided a professional service that was not a good fit for your client. After having used your service the client was hit with financial and personal damages. They can then file a lawsuit against you. In such a situation, a Professional Liability insurance policy can help pay for the costs that arise while protecting your business.
What does Professional Liability insurance cover in Tennessee?
Professional Liability insurance in Tennessee can cover you against claims of:
- An error or a mistake
- Dates missed
- Undeliverable services
- Breach of contract
If a lawsuit or claim is filed against your business in connection with any of the above or similar allegations, your Professional Liability insurance policy will pay your legal expenses incurred when defending your company. This includes attorneys’ charges, fees for documentation and underwriting charges, administrative costs as well as settlements and judgments.
In Tennessee, Professional Liability insurance covers you against the actual and alleged losses that could result from your work. Even if the lawsuit is ineffective, it can still be expensive. A Professional Liability policy protects the financial health of your business by paying legal fees relevant to your business. Without the policy the business would be liable for these costs and could cause bankruptcy or closing. In the event of a catastrophe, you might also be forced to tap into your personal savings to pay your legal expenses.
What isn’t covered by a policy?
Professional Liability insurance provides important security for small-sized businesses. But, it cannot shield you against every risk your business could face. Other forms of insurance coverage may be required to protect your enterprise.
Other types of coverage are available to small-business owners in Tennessee.
- General Liability – This insurance covers your business from lawsuits involving physical injury or property damage.
- Business Owner’s Policy – Also known as a BOP, this is an insurance combination that includes General Liability as well as Business Personal Property coverage to safeguard small businesses from expensive interruptions to services.
- Workers’ Compensation – Workers’ Compensation insurance defends against lawsuits as well as medical expenses that result from workplace accidents and illnesses. Insurance can pay for the loss of wages in case an employee is injured while at work.
Who needs Professional Liability insurance?
In Tennessee, Professional Liability insurance is beneficial to many types of businesses and professionals. This is especially true for ventures that offer information or offer educated advice based on special knowledge or expertise, design solutions or serve the needs of other people on their behalf.
Professional Liability insurance is a way to protect your professional reputation, financial viability and assets of your business from the potentially astronomical expenses of litigation (whether justified or not).
Professions that could require Professional Liability insurance are:
|Home Care Providers and Businesses||Yoga Instructors|
You can see that the kinds of professions who typically purchase Professional Liability insurance differ. It’s worth taking into consideration the nature of your job when you’re unsure if this type of insurance is suitable for your company and.
If you or your business engages in one of the following activities, it may be crucial to look into Professional Liability insurance.
- Offer regular advice or recommendations to your customers.
- Create products or customized solutions for customers and clients
- Represent the interests of the client on behalf of the client
- Other professional services for clients and customers
- Employ employees who engage in any of the above.
Do businesses need Professional Liability insurance in Tennessee?
Professional associations sometimes require their members to be covered by Professional Liability insurance. It is sometimes necessary to maintain minimum coverage levels in order to renew a license, or if you work in the industry. The website of your professional association should include information about their insurance requirements.
Clients might also demand that you carry Professional Liability insurance prior to when they begin working with you. This clause could be written in contracts for business, and you might be required to prove your insurance prior to beginning work on behalf of the client.
Even if you’re not required to have Professional Liability insurance, it may be prudent to maintain a policy. Customers might expect companies or professionals they hire to carry insurance. The policy you choose to use shows your professionalism to your clients and shows that you’re prepared to defend your reputation if need be.
How much does Professional Liability insurance cost in Tennessee?
In The Volunteer State, though the annual average price of Professional Liability insurance is $721, the price of is heavily influenced by the types of occupation it provides cover for. The riskier the work, the greater the price generally is.
Other crucial factors that play a part in determining the cost of Professional Liability insurance include:
- The volume and size of your business – bigger contracts usually mean more risk.
- The quantity of insurance you require – The more coverage you need and the greater amount you can be prepared to pay.
- The individuals covered – Are they qualified for the job they carry out and do they have prior claims or claims?
- The history of your individual claims – A history of making similar claims in the past may increase the amount you are charged for the policy.
Is Professional Liability the same as E&O coverage?
Both Professional Liability insurance and Errors and Omissions (E&O) offer the same protection. This insurance is able to protect your company from claims based on negligent, fraudulent or error. It will pay for the costs of defense, as well as any damages or settlements that result from the filing of a lawsuit.
How to get Professional Liability insurance for your TN business?
BizInsure makes it easy to compare Professional Liability policies and to find the most reliable insurance firms within the United States. Get comprehensive protection at an affordable price today.
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