Do You Need for Professional Liability Insurance?


Find the right Professional Insurance Coverage for your career.

Ask yourself a single question: “If I made a professional mistake of some kind, could I be sued?”

This is the overly-simplified way to determine whether or not you should obtain professional liability insurance. Professional liability insurance can go by many different names, depending on the individual’s profession. For example, physicians and medical professionals tend to call it malpractice insurance. Accountants, engineers, lawyers, and architects may call it professional liability insurance, and yet others call it errors and omissions insurance.

Generally, this is coverage that gives you (or your company) protection in the event that an omission, error, or mistake on your part caused a loss to the client.

Even the Best Professionals Need It

The most common groups of professionals purchasing professional liability insurance are those already mentioned above, but there is a longer list of groups and individuals who really need to gauge their need for this sort of insurance. Web hosting firms, wedding planners, ad agencies, printing services…these too are all firms or professionals who can benefit from errors and omissions policies.

After all, if you are going to provide a service to a client for a fee, you could make a mistake that might easily lead to an errors or omissions risk. You might not meet the agreed upon schedule, you might make a simple error that causes delays or loses the client money. In any instance of this kind, the client can bring a lawsuit and seek compensation.

As an example, a wedding planner in Miami makes arrangements for a client, booking the reception space, the food, the flowers, the DJ and all of the rest. They make a mistake with the catering firm, dating the contract for the 20th of December and not the 27th, which is the actual date. This could be disastrous, and lead to one major question – who is going to pay for this error?

Thus, the wedding planner who has the professional liability insurance would see the matter taken care of thanks to the policy. While this insurance won’t help the wedding planner’s reputation, the business could at least continue moving forward without a huge financial hit.

How Much Coverage is enough?

Most experts would agree that $1 million is the minimum amount, and it should be designed as offering defense coverage “outside the limits” plan. This is because that one million dollars can evaporate very quickly when a client wins a lawsuit and payout, and especially because the legal fees (defense coverage) might take up a huge portion of the policy.

For instance, that wedding planner in Miami may be sued for the cost of the wedding, plus emotional toll and more. The judgment could exceed the insurance coverage, and yet the legal expenses would still be left unpaid. Having the policy covering defense outside of that $1million limit would ensure that the business would not have to struggle to overcome that one small mistake.

Also, policies should include retroactive date options – meaning that the plan is going to remain as coverage from the date indicated. This means that if a client appears three or four years after the fact, seeking compensation for an event that happened during the insured period, you would still be covered by the plan those years down the road.

Depending on your type of business, you may need much larger insurance policies. However, almost any business owner should speak with their insurance provider about their options for professional liability insurance as it is something that can save a business when a single mistake or omission is made.

There are many options available for professional insurance coverage, contact the experts at Avante Insurance today to learn more.