As a business owner, you undoubtedly employ best practices to ensure your business grows and thrives. One of those best practices should involve securing reliable protection against future lawsuits.
Professional liability insurance covers costs when defending your company against claims of professional negligence. This type of commercial insurance will safeguard your company’s finances if clients allege that their financial losses were caused by your mistakes or omissions on the job.
While many of us may be at risk of being on the wrong end of these types of third-party allegations, some professionals and industries are particularly vulnerable. Read more below to learn what professional liability insurance is and who needs it.
Professional Liability Insurance
Professional liability insurance typically covers costs related to claims of professional mistakes, omissions, negligence, misrepresentation, and violations of good faith or fair dealing. Some of these costly fees may be associated with attorney fees, settlements, judgments, and court administrative fees should you face a claim.
It’s important to note that professional liability insurance policies do not provide coverage for claims of bodily injury, property damage, employment discrimination, or other claims better served by other business insurance offerings.
There are many different types of business insurance to protect your finances, but professional liability insurance is not only important — it is often required. Many clients require that businesses have professional liability insurance before signing contracts, while different states have mandates and policies that make this commercial insurance policy a must-have.
Who Needs Professional Liability Insurance?
Small business owners or employees who offer specialized services based on technical training may be vulnerable to performance-based lawsuits. Professional liability insurance offers financial protection to any responsible professional who may face related accusations. Architects, lawyers, and accountants are just some of the professionals who may need professional liability insurance because they rely on their expertise to run their business.
Additionally, professionals in higher-risk industries — as it relates to professional liability claims — may be required to secure this type of business insurance to comply with contractual terms or industry standards. Some of these industries include healthcare, construction, consulting, finance, and advertising. It’s important to talk to a trusted insurance broker about your unique business needs.
At Doeren Mayhew Insurance Group, we can guide you through the process of selecting the right business insurance solutions for you and your business. Contact us to learn more about professional liability insurance, or to schedule a consultation today.