Why you need to secure professional liability insurance for your business.
Despite 40% of small business owners reporting that they face professional risks, most do not secure professional liability insurance to protect themselves. Oftentimes, this failure to secure coverage stems from the belief that general liability insurance will offer coverage for professional liability threats. Unfortunately, this isn’t the case. Here’s why this coverage gap can only be covered by the right professional liability policy.
Professional Liability Risks
Professional liability issues arise when customers allege that your company has made mistakes or been negligent while rendering professional services. For instance, if your business offers consulting services and one of your customers experiences losses as a result of your advice, you could be held liable. In this case, your company may have to reimburse the customer for their losses. Professional liability risks are most common in industries that require consulting, training, special licensing, design, installation, or product testing services.
Professional Liability Insurance Coverages
Also known as errors and omissions insurance, professional liability insurance offers coverage in the event a customer suffers financial losses due to a mistake or act of negligence on your business’s part. Professional insurance will cover the cost of defending your company in a civil lawsuit, and will also cover your settlement costs.
Professional Liability Insurance Exclusions
Professional liability insurance will not cover all claims that your company faces. Here are some of the most common coverage exclusions:
- Malicious, dishonest, criminal, or illegal acts.
- Services you provide under the name of another business, charity, or organization that is not specifically named in your policy
- Liability for the damages sustained by another insured on the policy
- Bodily injury or illness
- Property damage
This is what you need to know about professional liability coverage. Interested in securing the right liability protection for your company? If so, contact the experts at Weaver & Associates in Arcadia, California. Our dedicated team is eager to get you the coverage you need today.