If you own your own business, you may need to have professional liability insurance . Like all forms of insurance, the goal of this product is to protect you from what may happen down the road to keep you out of financial ruin.
Not all forms of business professionals need this form. In particular, if you work for a company as an employee, you usually do not need it since that business will have its own coverage, which you should be part of. On the other hand, if you operate as an independent contractor or you run your own business, you may need this type of protection to protect yourself and your business from claims made against you.
Do you need you to have professional liability insurance if you have other forms of business protection?
Those who have an in home business or a business owners insurance policy should still carefully consider the benefits of having a personal liability insurance policy. In most cases, you will want to have both types of policies to protect you from any number of professional liability claims. This type of insurance protects you from any financial loss that is associated with lawsuits filed against you filed by your clients.
Why Do You Need Professional Liability Insurance?
Under law, if you fail to provide services considered to be expected in your field of professionalism, you could be held responsible for mistakes that cost your clients money, time or other recourse.
There are several key points to understand. First, if you operate a business , provide services or sell products, it is expected that you would have an extensive technical knowledge of that field. You may have extensive training in that particular area of industry. In other words, you are expected to know what you are doing.
You are also expected to be able to provide services and conduct yourself in a specific professional manner. If you do not do this, it could cause your clients to lose money, to be injured or otherwise harmed in some way.
If you do fail to provide the level of service or meet expectations, your clients may come after you in a court of law. While many people would hope that this would not happen to them, or even believe it is not possible to happen to them, it happens all the time. If they find that you have failed to do as is expected of you, they can file a lawsuit against you, personally. If you do not have any or enough liability coverage, you could be held accountable to paying the financial claim made against you.
Do You Need It Now?
Some situations may show that you need to have professional liability insurance right away. For example, if you have a business that is in operation, you should have this insurance in place. Every company should have some type or amount of this type of professional insurance protection otherwise one error or problem could cause the entire company to be put at risk.
Usually, if you are about to launch a product or service, it is best to have this insurance in place prior to doing so. That will provide you with the best long-term benefit. If you are an investor, or other professional handling the financials of your clients, it is particularly important to have this type of insurance in place.
It May Not Be Included
It is important to note that most other forms of insurance do not provide you with professional coverage you need. If you have commercial general liability insurance, you do not have coverage for yourself. You do not have coverage for contract performance disputes (when a client believes you violated a contract or failed to meet goals established in a contract) and you do not have protection from errors that occur. This type of insurance is often referred to as Errors and Omissions insurance.
Perhaps you believe you do not need this type of liability insurance. You may not realize it but most of the time claims against this type of policy are often made when a simple mistake is made. In other words, you do not have to be testing the waters or pushing the risk level to need this type of insurance protection.
Every company will make mistakes at some point. This type of insurance can help you to get through those more difficult times. In addition to this, this type of liability coverage also protects your employees and your business from your employee’s mistakes.
For example, an employee of yours failed to deliver product on time and the contract is null and void. Your client could come after you for this through legal means. A lawsuit could be on your hands. With this type of protection, you are protected from such claims.
There are other benefits to having this type of insurance protection too. For example, professional liability insurance can also help you to face embarrassment when you simply do not have the funds to pay on such lawsuits. It can help keep you and your business from having a bad reputation. It can also help you to keep your clients. If you have not yet considered the benefits of having this type of insurance protection, now may be the best time to consider it prior to any error or mistake happening.
If you are considering the purchase of professional liability insurance, the first step is to get a quote from a provider. Investigate the options they offer to you. Determine the amount of coverage you need based on your risk factors, your budget and your particular needs. Then, you may want to talk to them about other types of protection insurance. Know just what type you are buying and what it does and does not include.
Every business will have mistakes at some point. When you have liability insurance, you are protected from the financial fallout that can stem from such errors. It can also help you to ensure you business does not inflect financial strain on you personally.