What Is Professional Liability Insurance?
Professional Liability Insurance protects your business assets and interests from obligations you may incur from allegations of negligence stemming from the professional service and advice provided by you or your employees. Depending on your industry, you may be required by your state government to carry a Professional Liability Insurance policy.
In any professional setting, a client can become dissatisfied with the services being rendered or the advice being given. Even a seemingly trivial incident can spark a complaint, and whether an accusation of negligence is legitimate or not, it’s essential to be prepared to defend your business finances and good name. Professional Liability Insurance helps you do just that.
What does Professional Liability Insurance do?
Also called Malpractice Insurance or Errors and Omissions Insurance (E&O Insurance), Professional Liability Insurance provides a financial buffer against claims made by a client or customer who alleges negligence. It covers the costs associated with legal action and any judgments deemed payable to your client, up to your policy limit.
Like any type of insurance, it’s a safeguard against the unexpected.
What is negligence?
Negligence refers to the unintentional failure to provide the standard of care, knowledge or skill of the average professional peer in good standing, under similar circumstances. Any business that provides professional advice or service based on the expertise of its employees can be charged with negligence.
The good news is that there are protective measures you can take to minimize your risk of negligence. Accurately recording employee/client interactions and guidance plans for each client, mandating staff licensing and continuing education requirements, and keeping a safe and professional atmosphere on your business premises can all help you provide a high standard of care for your clients. But despite your best practices, nothing can fully insulate you from an accusation of misconduct. Professional Liability Insurance protects you in that instance.
When buying insurance, it’s important to explore the options available to you, as costs and coverage can vary from one provider to the next. By doing your due diligence, you’ll ensure the best insurance coverage for your specific business needs.
Explore Professional Liability Insurance coverage from Lockton Affinity today.