Business Liability Insurance protects a business against any losses due to lawsuits, accusations of damage and omissions of services.- Including legal expenses and third-party claims of inadequate services.
Professional Liability Insurance falls under the three types of Business Liability Insurance presently, including General Liability Insurance and Product Liability Insurance.
When a client raises claims relating to inconsistencies in the quality of product or service, Professional Liability Insurance protects the insured against any losses incurred safeguarding the business operation. Depending on the industry, the insurance type is also referred to as errors and omissions insurance or malpractice insurance.
If you are a service provider, getting yourself insured is almost a necessity. What’s important for small businesses is to shield themselves against alleged third-party claims or even lawsuits. It’s important because small businesses usually don’t have the resources to fight lawsuits. By getting insured you can avoid putting your business in jeopardy. Not just that, if you get sued the reputation of the entire business is at stake. That’s where professional liability insurance comes in handy.
Do I Need Professional Liability Insurance?
Before we take a look at the benefits of professional liability insurance, let’s first see if you actually need one.
There is no definite number of businesses that need professional liability insurance. If your business is at the risk of getting a repulsive action (valid or not) from a customer you directly interact with, it’s advised that you get yourself insured. We say valid or not because some services are individual dependent, what one may consider right the other may not.
Such as, if you have a consulting or designing business, what you provide may not align with what the client expected. Although no party is at fault here, the business owner or service provider might have to pay the cost. If you consider yourself to be in an identical business, getting business liability insurance is a must.
To help you figure out who needs insurance, we’re mentioning professions and professionals-including but not limited- to who need professional liability insurance: Insurance Agents, Consultants, Therapists, Interior designers, Personal trainers, businesses providing financial services, Architects, Lawyers, Attorneys, Developers, Individuals in the medical profession, Quality control specialists, Restaurants, Salons, Small food businesses, Travel agencies and business in the transport sector.
Advantages Of A Professional Liability Insurance
Protection against legal liabilities: A professional liability insurance protects a business against costs incurred due to negligence or errors in service or product and damages or injury to third parties. At the same time, legal fees, court fees, and the cost of filing legal papers are also included.
Ensures Credibility: You project a positive brand image when you insure your business with professional liability insurance. The insurance will provide strong support against any discrepancies, making the client feel confident about doing business with you.
Availability of retroactive claim: Retroactive date is the number of days before the date of starting of an insurance term. When your insurance provider provides you with a retro-active date it means you can claim for damage due to certain events before the beginning of your policy. The claim has to be made during the tenure of the insurance policy.
Peace of Mind: In a situation when a client blames you for the monetary or reputational loss, your business will suffer a significant loss. The thought of such a thing happening must not interfere with your work. When you’re insured, you know that if something similar happens; the insurance will provide you with the monetary help to battle the situation. Essentially, you will be at peace.
Cost Of Professional Liability Insurance
As already stated, a variety of sectors and industries avail insurance and the size of business can vary tremendously. An average cost, therefore, is not a clear indication of the probable cost as it involves extreme high and low premiums.
Although it’s not fair to generalize the cost, the median cost of professional liability insurance specifically for small businesses is $60 per month. The rough cost of $720 a year is what half of the small businesses pay, One-sixth of all businesses pay over $2000 as a yearly premium.
Multiple factors affect the cost, such as type of business, policy coverage, location and age of business and a yearly turnover of the business. The best way to estimate a cost is to look for industry and profession-specific premiums.
You can never go wrong with getting Professional Liability Insurance. At Beneficial Insurance Solutions you can get started with a simple call. Get your business secured now!