Commonly called errors and omission insurance, professional liability insurance protects individuals or businesses that provide a professional service for others. For instance, insurance agents, lawyers, doctors, publishers and consultants are some people who often purchase professional liability insurance. By securing a professional liability insurance policy, these professionals may be able to protect themselves financially from errors and omissions during the course of doing business.
Understanding Professional Liability Insurance
Professional liability insurance is much different from other forms of business insurance. With professional liability insurance, you may be covered when you or your business is being sued for negligence, or when your client suffers losses based on taking professional advice from you. It is a separate policy from general liability insurance, which you secure to protect your business from claims associated with property damage or bodily injury at your premises. In the past, some professional liability insurance policies have covered:
- Fees associated with hiring a lawyer
- Settlement and judgment costs
- Harm caused by services rendered within a specific period of time
Professional liability insurance is the coverage you need if you are worried about being sued based on providing services or advice to your clients. It helps ensure that your business remains financially solvent when you are facing a lawsuit.
Why Professional Liability Insurance is Important
Lawsuits involving businesses occur 80 million times each year. Regardless of the size of your business, the more you grow, the more you expose your business to unknown risks. To make matters worse, many of the lawsuits stem from an employee making a simple mistake. When this happens, the costs to your business can easily approach thousands or even millions. Instead of closing your business down in response to the fear of being sued, professional liability insurance helps business owners protect their business operations. With a professional liability insurance policy, if a company is sued, their coverage can help cover their expenses instead of paying for the lawsuit with business revenue.
Professional liability insurance is known by many different names depending on the professional services you provide. These policies help business owners protect their business when they are threatened with a lawsuit for a professional mistake. With this additional coverage, you may be protecting your business from financial ruin in the long run.
Find out if this coverage is right for your business. Call Avanti Associates at (914) 273-8511 for more information on Armonk professional liability insurance.