As a business owner, you have to juggle multiple responsibilities on a regular basis, and you may find yourself in legal trouble at any moment. While obtaining commercial insurance is a great way to protect your business, it may not always be enough. Adding professional liability insurance is an option to consider. Here’s an overview of how Professional Liability Insurance can protect your business in unique situations.
What Is Professional Liability Insurance?
If you perform a service that accidentally harms your client, you are vulnerable to a potential lawsuit. Professional Liability Insurance protects you in this situation. The policy covers you against allegations that you made a negligent error while performing service for a client. Professional Liability Insurance covers your legal fees and potential settlement costs as you go through the legal process. The policy also covers your business against allegations of misrepresentation and poor advice.
Is Obtaining Professional Liability Insurance a Legal Requirement?
Generally, obtaining professional liability insurance is not a legal requirement. However, many clients may require that you purchase the coverage before finalizing your contract. Also, be aware that some industries require businesses to add professional liability insurance before their opening. It’s recommended that you check your state’s laws to see if purchasing professional liability insurance is a legal requirement. If you perform a service without purchasing legally required insurance, you may be subject to a fine or another harsh penalty.
Who Should Purchase Professional Liability Insurance?
The following professionals need professional liability insurance:
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Doctors
As a doctor, you have dedicated your life to serving others, but there may be times when your patient may not agree with your recommended treatment options. There’s a chance you could be sued based on allegations of malpractice. Professional Liability Insurance covers you during the legal process while you fight for your reputation.
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Lawyer
Lawyers are vulnerable to lawsuits alleging that their error caused significant financial harm. While you work hard to clear your client’s name, you could still be sued if you don’t meet your client’s expectations. Research shows that malpractice lawsuits are on the rise. Professional Liability Insurance gives you a layer of protection if you are sued.
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Accountants
Accountants handle sensitive information. At some point, you may make a mistake while handling one of your client’s financial statements. This puts you at risk of being sued. Professional liability can help you in such cases.
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Consultants
Consultants advise clients to help them reach their goals. Perhaps one of your clients believes that you gave them poor advice. They decide to sue you as a result of the consequences. Professional Liability Insurance will cover you.
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Advertising Agencies
Advertising agencies offer strategies to their clients to help them grow their brands. Your agency may be at risk of being sued if a client believes that your strategy caused them significant financial harm.
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Graphic Designers
Graphic designers use their creativity to promote their client’s ideas. If one of your clients isn’t satisfied with your work, they could sue you.
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Market Research Firms
Market research firms provide valuable information to their clients to help them plan for the future. If your analysis turns out to be wrong, you’re at risk of a potential lawsuit.
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Real Estate Agents
Your clients trust that you will always work with their best interests in mind. If your advice leads your clients down the wrong path, they could sue you for negligence.
Consult with J. Archer Insurance Group
Professional Liability Insurance helps protect your business from suffering a catastrophe. It’s also recommended that you speak with your insurance agent to see if you need to add other types of commercial insurance, such as workers’ compensation. If you have any questions or need more information, contact the team here at J. Archer Insurance Group, and we will assist you.
