It is not as simple as recognizing that you need professional liability insurance and calling an agent to purchase it. First, you need to decide what type of coverage you need. This will depend on your specific business needs and liability. It can be confusing to choose the right policy for you. Let’s take a look at some of the most popular options.
Insurance for professionals in specific industries
Each industry may have its own requirements for liability insurance. Insurance must be purchased for errors and omissions by those working in the financial sector (real estate, insurance and investing). They are protected against financial losses if they cause financial damage to clients by making an error or omission.
Malpractice insurance is mandatory for those who work in the medical field. They are protected against any claims arising from the accidental infliction of medical harm on patients by omission or negligence.
Business owners who do not have a professional requirement for liability coverage can look into professional liability insurance. Professional liability insurance protects professionals from claims arising from negligence that causes client harm. It is available to information technology professionals, life coaches, gym owners and other people.
Non-specific professional liability insurance
For business owners, there are non-specific professional liabilities policies like general liability insurance. General liability insurance protects against bodily injury or property damage that is caused by the business’ operations. This insurance is not focused on the specific needs of professionals and does not cover the same.
For the business owner who is savvy, professional indemnity insurance can be a great option. If your company is sued for slander and libel or breach of contract and damages, professional indemnity insurance will protect you and your business while you pay the claim.
Personal versus professional
The overlap between professional liability insurance and personal insurance coverage is another confusing aspect. Your personal homeowners and auto coverage may not cover your business if your vehicle is used for business purposes. Your personal insurer will likely deny these claims and you may even be subject to losing your policy. Personal risks are very different from professional or business risks. Your insurance company must be informed of all risks before they underwrite your policy.
Limits and deductibles for professional liability
You need to make sure you have realistic limits and minimum deductibles, regardless of the type of professional liability insurance that you select. To save money on your premiums, a high deductible can lead to the loss of business assets. You will have to liquidate these assets to pay the deductible. Limits that are too low can force you out the business, especially if you have to pay a large amount of money for a claim.
Your business is your future and present livelihood. This is an investment of time, money, and heart that should be protected just like any other investment. You can protect your investment and your financial future by purchasing proper liability insurance.