Think about the risks you face in your professional career. You may want to look at certifications, ways forward for advancement, and other aspects while also considering risk mitigation or transfer policies such as Professional Liability Insurance that can help cover any damages.
You do not want to deal with various court costs, legal fees, bodily injury claims, and general liability matters because you did not do the due diligence on your professional liability insurance policy.
Let's learn more about professional liability insurance coverage options and how it compares to errors and omissions insurance.
What is Professional Liability Insurance?
Professional Liability covers many professionals, from consultants and accountants to architects. It's designed for any traditional profession that requires them to carry a high risk to do their job well - this includes both individuals working alone or as companies themselves!
Other Coverages under Professional Liability are Cyber Liability, Foreign Liability, Liquor Liability, Pollution Liability, and Errors & Omissions.
What Are Errors and Omissions Insurance?
Errors and Omissions Insurance is covered when you purchase professional liability insurance. It protects professionals and companies in the real estate, law, and IT sectors from claims made due to inadequate work and negligence.
You may do something wrong (error) and miss a piece of information (omission). It is required for both service and advice provider companies.
What Do These Insurance Cover?
Remember that we will use professional liability insurance only because it is the same as errors and omissions insurance.
Both Insurance options cover you when you make a mistake in the professional service you give to your client. There will always be mistakes whether you are a newbie or an expert.
The client who receives your professional service would sue you if your mistake resulted in financial loss.
The tricky part is a client may sue you for anything that makes them believe there is a mistake. Although you are the professional here, it is a mistake if your clients think you made a mistake.
So, what can professional liability insurance cover?
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Personal Injury- This implies damage to someone's character. It may be from an advertisement or a social media post.
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Inaccurate Advice- This is when damage occurs due to your inaccurate professional advice.
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Negligence- This happens when you become careless about your client's needs. It means you failed to carry out the needs of your client.
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Misrepresentation - This is a false statement of a fact made by one side and affects the other side's decision to agree to a contract.
And here's the list which is not covered by professional liability insurance
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Physical Injury or Property Damage- When your service injures someone or damages their properties. There is separate insurance for this kind of claim.
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Data Violation- This is when your business loses data. A different type of insurance called cyber liability insurance takes care of data breaches.
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Work-related Illness- If an employee falls ill due to their job, different insurance covers you. It is called workers' compensation insurance.
How Does Professional Liability Insurance Work?
There are two ways. These ways are classified based on period.
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Retroactive Date- This covers incidents happening on or after a specified date in your policy.
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Extended Reporting Period- This fills your claims after your policy has expired for a certain period.
Who Should Get Professional Liability Insurance?
Whether you are an individual professional or you have a company, you should get professional liability insurance. If you offer:
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Advice based services
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Services directly to customers and
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Contract signing
These are the coverage areas of professional liability insurance. If your service is based on one of the above, you should consider it.
Looking For Business Insurance? Reach Out To The Thumann Agency Today
Our team at the Thumann Agency is here to help you obtain the right professional liability insurance quote. If you are looking for coverage that can account for legal defense costs, legal expenses, incorrect advice, and more, our team can certainly help.
Find out how the Thumann Agency can help independent contractors, small business partners, and general business professionals. Call 972-991-9100 to learn more about our insurance services!