Home » Professional Liability Insurance: Safeguarding Your Services
May 9, 2024
Clearwater Partners

Professional Liability Insurance: Safeguarding Your Services

Delivering reliable, timely and consistent services to your clients is likely one of your company’s top priorities. However, even the most dedicated businesses staffed by highly experienced employees may occasionally fall short. Given this unfortunate inevitability, your organization should be diligent in establishing and maintaining appropriate loss control measures that can mitigate the fiscal fallout of shortcomings. This includes a suitable professional liability insurance policy.

What Is Professional Liability Insurance?

Also known as errors and omissions insurance, professional liability insurance establishes a contractual agreement between your company and its carrier. In exchange for its premiums, your business retains the right to file a claim for financial assistance following accusations of providing subpar services that resulted in third-party financial losses. If approved, your company may receive a payout to help limit out-of-pocket expenses and damages, such as attorney fees, court costs, settlements and judgments.

What Does Professional Liability Insurance Cover? woman in white dress shirt sitting on chair

While the finer details of a professional liability policy may vary, coverage can typically provide financial protection from the following allegations:

  • Professional errors
  • Inaccurate advice
  • Misrepresentation of services
  • Oversights
  • Omissions
  • Negligence
  • Failure to adhere to industry standards
  • Invasion of privacy
  • Missed deadlines
  • Breaches of contracts

Consider the following real-world examples of why professional liability coverage may be a critical investment:

  • A client requests that your risk management consulting business provide an assessment of their workplace’s perils and hazards. After offering your insight, an accident is caused by a threat you failed to notice. In this situation, your client may sue your company, potentially resulting in significant financial losses and reputational harm should you be uninsured.
  • Imagine you operate as an HVAC contractor, contributing essential and specialized services on various construction job sites. Unfortunately, circumstances keep you from being able to complete your work on time, delaying the project as a whole and resulting in costly losses. The developer may pursue you to recoup their losses, at which point professional liability insurance can act as a crucial financial buffer.
  • Professional liability insurance may be known as medical malpractice insurance in the health care industry. Should a practice or professional misdiagnose a patient or otherwise commit an error while administering services, the resulting financial ramifications could be devastating for those who lack adequate coverage.

How Much Does Professional Liability Insurance Cost?

Insurance carriers must consider various factors when quoting your business rates for adequate coverage. In many cases, this may include analysis of the following:

  • Location
  • Industry
  • Services offered
  • Years in business
  • Workforce size
  • Previous claims
  • Coverage limits

We’re Here to Help

With an experienced and committed team of knowledgeable insurance professionals, Clearwater Partners is ideally positioned to help businesses acquire and maintain suitable professional liability insurance. Visit our website or call 813-497-7579 to learn more or to get a personalized quote.

 

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information. 

Categories: Professional Liability

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