This policy, also known as errors and omissions insurance, protects businesses against client lawsuits claiming that work was unsatisfactory, negligent, late, or never completed.
Professional liability insurance is designed for businesses that make a living off their expertise.
Even the most experienced and thorough professional service provider makes mistakes. Unfortunately, clients may not be so understanding if your error costs them considerable time or revenue.
Professional liability insurance coverage helps protect you from unsatisfied clients. For example, if you miss a project deadline, make an omission in your work, or provide ineffective business advice, your client may sue.
If you’re served with this type of lawsuit, your professional liability insurance policy will cover legal defense costs up to your policy limit.
Yes, clients may request a certificate of insurance as proof that you have coverage. They want peace of mind that if you don’t meet their standards, they can recoup their losses.
Maintaining your professional liability coverage offers you the same assurance.
Many professional liability insurance policies are written on a “claims-made” basis with a retroactive date. This means that in order to collect your insurance benefits, your professional liability policy must be active:
With a claims-made professional liability policy, your coverage kicks in only when you file a claim during the policy period. Continuous coverage is key if you don't want to pay out of pocket for lawsuits.
General liability and professional liability insurance both protect against common small business liability claims, but they cover different types of lawsuits.
A general liability policy covers customer bodily injuries, customer property damage, and advertising injuries. In contrast, professional liability insurance covers any legal defense costs when a client or customer suffers a financial loss due to your professional services or advice.
You can bundle general liability insurance with commercial property insurance with a business owner's policy (BOP). By bundling the two together, you can save money.