The need to get professional liability insurance can’t be overemphasized if you are running a business where you offer services to the general public. You will need to know the disadvantages and advantages of having errors and omission insurance.
Professional liability insurance protects professionals, such as lawyers, yoga instructors, consultants and physicians against negligence and other claims initiated by their clients.
Professional liability insurance, which also is called professional indemnity insurance or errors and omissions insurance is here to offer small business owners financial protection.
When it comes to offering professional services, nobody is above mistake. You might succeed at fixing some errors while some other errors might cost you and your client so much money to fix.
It is in your best interest to understand the pros and cons of getting professional liability insurance for your small business. Do not forget to check out My Top Insurance Blogs’ previous article on the difference between general liability insurance and professional liability insurance.
In this article, we shall discuss the advantages and disadvantages of having professional liability insurance.
Policy Wording and Coverage Availability
The absence of standard policy wording in professional liability insurance is one of the top disadvantages.
Before getting errors and omission insurance, it will be in your best interest to read the individual policies carefully to be sure it addresses your business needs.
For instance, some professional indemnity insurance policies may not cover punitive damages, which could cost you a considerable amount of out-of-pocket expense.
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Also, not every professional liability insurance provider offers coverage for your particular business. Some insurers specialize in certain kinds of businesses. You may have to invest extra time to search for a suitable professional liability insurance company near you.
Policyholder’s Inability to Control Their Professional Liability Insurance Cost
The fact that some of the factors that can influence the cost of your professional liability insurance rate are out of your control is a huge disadvantage.
Some of the factors that can affect your professional liability insurance cost in the United States are:
- The number of claims filed in your industry
- Your company’s current financial status
- How long you’ve been in business
- State laws
You can get the best professional indemnity insurance for consultants by talking to a provider near you.
Your Ability to Lower Your Professional Liability Insurance Premiums
Would you like to know the advantages of having professional liability insurance coverage as a legal practitioner, consultant, medical expert, yoga teacher or what have you? We can help you pinpoint some here.
The ability to influence some of the factors that control your professional liability insurance cost is an advantage.
A smart way to control the cost of your errors and omissions insurance policy is to reduce risks in the workplace. For instance, ensure employees have the proper background to carry out their duties.
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Also, make it compulsory for all your employees to complete safety training, and always provide safe and well-equipped working conditions. The extent to which these factors will affect your overall indemnity insurance premium depends partly on the status and type of business you operate.
Affordable and Time-Saving Protection
One of the most amazing advantages of professional liability insurance is that it can save your business considerable expense if you have to make a claim when sued by a client.
When you are sued by a client for any professional error or omission, you will be forced to pay for the legal fees from your pocket if you don’t have professional liability insurance cover.
Although the cost of errors and omission insurance could be high, it’s nothing compared to what you would have paid in fine, damages and legal fees if you were sued for a professional error you committed while discharging your duty.
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Note: While getting professional liability insurance quotes online or through an independent insurance agent near you, do not forget to pay attention to your policy’s limit.