Building a small business is a big accomplishment. Protecting it is important, as even the smallest mistake could undo all your hard work. Professional Liability insurance is one way you might shield your business against some lawsuits commonly brought by clients and customers.
Let’s take a closer look at Professional Liability insurance and how it could benefit your small 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.
Professional Liability insurance helps shield your business’ finances by covering the legal expenses associated with certain types of liability claims. This includes paying attorney fees and court costs, including settlements and judgements ordered by the court.
How Professional Liability can benefit small businesses
Professional Liability can benefit small businesses in many ways. Here are a few of the most common that may apply to you and your business.
1. It protects small businesses from common risks
If you or your employees provide professional advice and services to clients, you may want to consider Professional Liability insurance. A policy typically provides coverage for:
- Breach of contract
- Undelivered services
- Missed deadlines
Even the most careful person will inevitably make a mistake. If this error causes a financial loss for your client, they may seek compensation. Professional Liability insurance can help remove the financial burden of claims or lawsuits from your shoulders, so you are not left holding the bill on your own.
2. It can help protect a wide range of small businesses
Professional Liability insurance can help protect many types of small businesses. From accountants and engineers to personal trainers and home health aides, a policy can cover a wide range of occupations.
Unsure if Professional Liability insurance is right for your business? If you or your employees do any of the following in the course of their work, you might want to consider having a policy:
- Provide clients or customers with specialized services
- Offer advice to clients or customers that they use to make decisions
- Represent their clients’ or customers’ needs on their behalf
The above activities present an opportunity for professional liability claims that can be covered by Professional Liability insurance.
3. It gives customers and clients confidence
Professional Liability insurance can do more than just protect your business against claims and lawsuits. It can also give customers and clients more confidence in the work that you do.
A Professional Liability policy adds professionalism to your business. It communicates to clients that you value your professional reputation and take pride in the work you do. You are willing to defend both in court, which shows that you are confident in yourself as a business professional.
Having this type of coverage also gives clients valuable peace of mind. If a policy is required by your state or professional association, clients can see that you are carefully following the law and may be more likely to also be careful in the work you are doing for them. It also lets them know that if something does go wrong, you’ll be able to compensate them for any financial loss.
4. It covers you even if you are not at fault
Lawsuits can be expensive, even if you are not at fault. Attorney’s fees and court costs can quickly add up, especially if a suit drags on for weeks, months or even years. Thankfully, Professional Liability insurance also covers you for meritless claims, so you’re not left with a massive bill after defending your good name in court.
5. It can protect you for an extended period
Many Professional Liability policies are “claims-made” policies. This means that they will protect you based on when a claim is made, regardless of when the actual work was completed. This is important if a client sues months or even years after you provided them with your services.
Coverage for claims-made policies begins from a date agreed upon by you and your insurer and continues for a period after the policy officially ends. This helps protect your small business for some past work.
Finding Professional Liability for your small business
Now that you better understand how Professional Liability insurance could benefit your small business, it might be time to find a policy. BizInsure has simplified the process of finding insurance, so you can instead focus on the work that you do best.
In just 10 minutes (or less), you can compare policies from top-tier insurers, choose the best option for your business, and buy. You’ll even receive your policy confirmation instantly via email.
Visit the BizInsure website to start comparing Professional Liability insurance today.