Professional Liability Insurance
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Virginia has over 795,000 small companies, as per the most recent data released by the U.S. Small Business Administration Office of Advocacy. The economy of the Old Dominion state is fueled by small businesses which comprise 99.5% of businesses in the state. Small businesses also added more than 327,816 new jobs in the year 2022.
The top five industries in Virginia’s state for small-sized businesses are:
- Accommodation and Food Services
- Health Care and Social Assistance
- Professional, Scientific, and Technical Services
No matter what industry you are working in, you will likely want to safeguard your small company from the most common risks. Professional Liability insurance is a option to accomplish this. Insurance policies can safeguard many different companies and professions from lawsuits that could end up financially damaging for your business.
What is Professional Liability insurance?
Small businesses that provide professional services or give suggestions to clients are advised to consider purchasing Professional Liability insurance in the Old Dominion.
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. It is usually alleged that your products, services or employees you provide to your customers cause financial harm to your customers.
For instance, suppose you offered a professional solution that didn’t please your customer. They suffered financial and personal damages after using your offering and as a consequence, they initiate a lawsuit against your company. In this case the Professional Liability insurance policy will aid you in paying for the expenses incurred while defending your company.
What does Professional Liability insurance cover in Virginia?
Professional Liability insurance in Virginia will protect you from allegations of:
- Mistake or error
- Missed deadlines
- Undeliverable services
- Breach of contract
If a claim or lawsuit is brought against your business that is based on any of the above the above, your Professional Liability insurance policy will cover the legal costs in defending your business. The policy will cover lawyers charges, underwriting costs and documentation fees, administrative costs, settlements and judgments.
Professional Liability insurance in Virginia provides protection against actual or alleged losses due to your work. Even if the lawsuit is not based on merit, it could still be costly. A Professional Liability policy helps protect your business’ finances by covering legal costs. Without it, you would be responsible for these costs, which could potentially lead to bankruptcy or business closing. If the worst happens you may also have to tap into your personal savings to cover your legal expenses.
What isn’t covered?
Professional Liability insurance provides important protections for many small businesses. It does not protect against all risks your company may face. In order to fully safeguard your business it is possible to purchase additional forms of insurance.
Small-sized business owners in Virginia may be interested in these and other types of insurance to meet their business insurance needs:
- General Liability also referred to as Commercial General Liability (CGL) or “slip and fall coverage” It can protect your business against bodily injury and property damage lawsuits from outside parties.
- Business Owner’s Policy – Shortened to BOP, this is an insurance combination that includes General Liability and Business Personal Property insurance to shield small-scale businesses from high-cost service interruptions.
- Workers’ Compensation – Workers’ Compensation insurance defends against lawsuits as well as medical costs that may arise due to workplace accidents or illnesses. The insurance may pay for lost wages if an employee gets injured on the job.
Who may need Professional Liability insurance?
In Virginia, Professional Liability insurance can be beneficial for a wide range of businesses and professionals. This includes ventures which provide advice or make educated recommendations based on special knowledge or expertise, design solutions or serve the needs of other individuals on their behalf.
Professional Liability insurance can safeguard your reputation as a professional, its profitability and assets for your business from the expense of lawsuits (whether justified or not).
The following professions may need Professional Liability insurance:
|Home Care Providers and Businesses||Yoga Instructors|
As you are able to see, the categories of professions that typically purchase Professional Liability insurance vary. You may want to consider the type of work you work when you’re unsure if this kind of insurance is right for your business and you.
Individuals or businesses that engage in the following types of activities should think about getting Professional Liability insurance:
- Regularly provide advice or recommendations to clients
- Create solutions or products that are unique for customers and clients
- Represent the interests of a client on behalf of the client
- Other professional services offered to clients and customers
- Employ people who commit one of the things listed above.
What are the Professional Liability insurance requirements in Virginia?
Certain professional associations require that their members be covered by Professional Liability insurance. Maintaining minimum levels of coverage can be an essential step to obtaining and renewing a professional certificate or a position in the industry. Your professional association’s website should provide information about their insurance requirements in case they have any.
Clients may also insist that you have Professional Liability insurance to work with them. This may be included in contracts for business and you may be required to provide proof of insurance prior to beginning work for the client.
Even if you’re not required to have Professional Liability insurance, it could be prudent to maintain an insurance policy. Customers expect that firms or consultants they choose to work with are insured. Your insurance policy is a sign of professionalism to your clients and shows that you’re ready to protect your reputation in the event that it is needed.
How much does Professional Liability insurance cost in Virginia?
The cost of Professional Liability insurance may vary greatly. In the Old Dominion, even though the average annual price of Professional Liability coverage is approximately $812, it depends on the business nature.
The cost of Professional Liability insurance is heavily affected by the kind of profession it provides cover for. Generally, the riskier the work, the greater the cost to get insured.
Other important factors that play a part in determining the cost of Professional Liability insurance are:
- The volume and size of your business – larger contracts generally mean greater risk.
- The amount of insurance coverage you need The greater amount of coverage you require the higher you could expect to pay.
- The individuals covered – Do they possess the qualifications for the work they perform and have they previous claims background?
- Your history of personal claims. If you have made similar claims in the previous policies, the price of your policy may be more
Is Professional Liability the same as E&O insurance?
Both Professional Liability insurance and Errors and Omissions insurance offer the same coverage. This insurance is able to protect your company from claims arising from negligence, fraud, and mistakes. It will pay for the cost of defense and any settlements or damages that result from the filing of a lawsuit.
Recommended reading: E&O insurance vs Professional Liability insurance
Where can Virginia small businesses buy Professional Liability insurance?
It’s easy to compare Professional Liability policies to find reliable insurance providers in the U.S. BizInsure will help you get comprehensive coverage at the lowest price.
Learn more about Professional Liability insurance in the states where you work.
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