You wake up in the middle of the night covered in sweat. Your business suddenly ends in the soup. Is this the nightmare you’ve been fearing?
Your business is your livelihood. If something happens that causes it to close or suffer then you stand to lose a lot. Whether that’s in the form of financial loss, loss of brand reputation or even worse loss of life.
Well, if this seems familiar to you, don’t fret, this blog explains what professional liability insurance is and why you might find yourself needing it.
What is Professional Liability Insurance?
Being a professional exposes you to several risks. Your clients might use the information you share with them for personal gain or might make mistakes that cost your business hard cash. Therefore, professional liability insurance is very important for anyone who has made the decision to start their own company or practice.
Professional liability insurance provides protection from claims made against you and your business, including defamation, copyright infringement, and breach of contract.
How To Get a Quote for Professional Liability Insurance?
- Go online to get a quote. There are many websites that offer free quotes for professional indemnity insurance online. However, it’s important to note that these sites don’t necessarily provide accurate information on what coverage is available and how much it will cost you. If you decide to go this route, make sure the site is secure (i.e., does not contain any links) before entering any personal information about yourself or your business.
- If you’re concerned about professional liability insurance, it’s a good idea to get a quote from an insurance broker. An insurance broker can help you choose the right policy for your needs, find the best value policy, and make sure that your business is fully protected.
- You can also get quotes from individual insurers or online insurance brokers. These professionals will answer any questions you may have about how professional liability coverage works and how it protects you against legal claims made against your business or personal assets.
What does Professional Liability Insurance Cover?
Professional liability insurance covers errors in professional services. It covers damages to clients, third parties and the public that result from negligence, breach of contract or professional misconduct. This coverage can include:
- Errors in professional services (e.g., malpractice)
- Damage caused by an error in your work product or conduct (e.g., negligence in drafting a document)
- Claims made against you by clients for failure to perform their contractual obligations.
- Damages or injuries resulting from negligence or misconduct on behalf of the insured.
- Settlement costs and attorney fees incurred by third parties due to alleged malpractice on your part as a professional.
Some of the Instances of Professional Liability Insurance
While these policies vary depending on various factors (such as whether you work in healthcare), most policies provide protection from claims made by clients who were harmed due to negligence or misconduct on behalf of an insured individual or company–including situations where:
- A patient was injured during treatment because staff did not follow proper protocols.
- An employee failed to perform duties according to standards set forth by state regulations.
- An engineer designed faulty products that caused injury when used improperly.
- Clients who sue for breach of contract because they didn’t receive what they paid for (e.g., an attorney who failed to win their case) or were injured during treatment (e.g., a chiropractor whose client slipped on wet floor mats).
- Competitors who claim unfair competition due to false advertising (e.g., an accountant advertising lower rates than other accountants).
- People injured while working at your business premises (e.g., an auto mechanic whose employee drove into another car).
What are the Costs Covered by Professional Indemnity Insurance?
Professional indemnity insurance covers errors, omissions, and malpractice. This means that it will reimburse you for the cost of defending yourself in court if a client sues you for damages. Professional indemnity and public liability insurance from Australia covers legal costs,court costs and settlement costs. So, if a client is unhappy with the service they received from your company and decides to take legal action against it – professional liability insurance will help pay for their legal fees too!
Professional indemnity cover doesn’t just cover one-off mistakes made by staff members, it also protects against long-term problems such as poor-quality work which leads to bad reviews online or even losing clients altogether due to poor performance levels.
While professional liability insurance is not a requirement for all professions, it can be very beneficial if you work in one that requires it. If you’re looking for a way to protect yourself from the costs of errors and omissions in your business or practice, then this type of coverage could be right up your alley.
Protect your investment and your future!