In data gathered in 2018, results state that there are 92 million professionals working in the US alone. No matter how trained and experienced these people may be, chances are, they will make wrong judgments throughout their careers. That is where professional liability insurance comes in.
For instance, in the healthcare industry alone, there have been about one million medical mistakes made by professionals, with about 250,000 errors leading to fatality every year.
Granted, every person can make mistakes, even if you are a professional who has been in practice for many years. That is why having a safety net like professional liability insurance is one of the best decisions a service-providing business can make.
Professional liability insurance, also called errors and omissions insurance, safeguards professional services providers against claims made by a current or former client related to negligence, error, or omission. In other cases, the coverage extends to copyright infringement and personal injury, as well.
Professional liability is usually applicable to people or businesses offering a professional service, regular professional advice, or regular contractual services.
The scope includes lawyers, doctors, engineers, architects, accountants, and others who provide their expert knowledge. It also extends to beauty services, business coaches, counselors, therapists, personal trainers, photographers, and other professionals that provide particular skills and abilities.
If a customer believes that a mistake caused them personal, professional, and financial damages after they got the professional's service, they can file claims of negligence against the provider. By getting professional liability insurance policies, the providers can get coverage for defense costs and settlements against the claims on their services.
If the business involves making a living out of their specialization, they need a professional liability insurance policy. Though human errors are a fact of life, the people receiving erroneous services won't be understanding if they suffer from these errors or omissions.
In the world of business, someone will always feel dissatisfied with the service they received. Whatever field you may come from, failure to meet the deadline, making an omission in the final work, making a wrong diagnosis, or giving the wrong advice can get any professional a case in court.
As the legal process can be daunting, not to mention expensive, ensuring the business is covered by the best professional liability insurance policy is a strong way to protect one's practice.
If claims made against a professional and their business is said to be rooted in negligence in their service, professional liability coverage can provide support in the legal process. Whether a services provider is accused of giving the wrong advice or omitting an essential piece of info for their client's welfare, this liability policy can provide valuable protection.
Here are some examples of negligence in the workplace:
Insurance companies that specialize in professional liability coverage can offer guidance and support on the entire legal defense process and provide advice in handling cases like this, especially for a small business. Defense costs are normally needed for problems like errors in management consulting, property management, or real estate handling.
Will a professional liability policy protect a professional even when a claim is baseless? Yes. For claims resulting in personal injury, like slander or libel, coverage can be provided by a competent insurance company against any related legal action.
A business might hire additional help to keep work flowing smoothly. However, these independent contractors and temporary workers represent the company and the brand. So, if they commit an error or omission in providing professional services, the business can be sued and included in the claims.
Despite having been completed in the past, a former client can apply for claims against a professional service provider. Even if this claim occurred within a policy period where a business worked with a different insurance company, they can have retroactive coverage included in their policy.
This additional coverage can be provided for a business for cases when the alleged incident happened at a retroactive date when they were insured with a different carrier. This means that a company can still be covered even for services they have provided in the past, which is considerable protection with valuable benefits.
Several factors can impact how much you have to pay for professional liability insurance coverage. As an estimate, the national average cost in 2019 for this kind of insurance is $46 per month or $552 per annum.
However, professional liability insurance cost can change due to several factors, including the following:
Professional liability insurance covers breach of contract, errors or omissions, misleading statements, breach of confidentiality, failure to perform services, and negligent acts. Defamation, intellectual property rights, defense costs, inquiry attendance expenses, loss documents, automatic subsidiary coverage, and extended reporting period are also included.
Professional liability insurance is essential to many businesses that earn by providing professional service including accountants, engineers, architects, business consultants, counselors, lawyers, real estate agents, and other people who offer their professional expertise as a product.
The cost of professional liability insurance can vary depending on the circumstances. High-risk industries pay higher rates. Meanwhile, low-risk industries enjoy lower rates. The amounts can also be affected by the extent of the liability coverage acquired by the business.
Professional liability insurance is worth the cost; the return of investment is incomparable. The potential risks brought by claims can lead to serious financial loss. But more than that, it can stain personal and business reputation.
If any of the described risks and processes related to your current business, then there's no need to wait. Contact a trusted insurance provider and invest in professional liability insurance right away.
What else do you want to learn about professional liability insurance? Do you need help choosing the best company? Let us help you! Contact Assured Standard today!