Business is going great. You’re seeing record profits despite the tough economy. You’ve even just hired half a dozen new employees. Things are really coming together.
And then it happens. One day, a certified letter arrives in the mail. You, and your company, have been named in a lawsuit, alleging that mistakes your company has made have cost X-amount of dollars in loss.
It doesn’t matter what your business is or how much X-amount of dollars of loss really is. It doesn’t even matter if your company actually made any errors or caused any loss. The fact is that even a baseless lawsuit can bring a successful business to its knees. The high cost of a legal defense and the time away from the office dealing with a lawsuit can cost your business time and money that cannot be recouped.
Or can it be? That’s where professional liability insurance can help.
A professional liability insurance policy is different from the general liability policy your business may already have. It covers you in the event that a client alleges that you were professionally negligent, failed to perform professional duties, or for errors or other contract performance disputes. Most importantly, it also covers the legal costs of defending your business, even if the allegations are baseless. And, it will pay for any judgments against you, up to the limitations of your policy.
Even if you’ve never been involved in a lawsuit before, it’s important to have a professional liability insurance policy in place. Just like other forms of insurance, the time to protect yourself is before you have a problem. Regardless of your level of skill, without a professional liability insurance policy, your business is at risk. After all, mistakes happen and even if you’re confident in your own abilities, a liability policy will protect against potential mistakes by your employees or independent contractors you hire.
In addition to the peace of mind that comes with knowing your business is protected, a professional liability insurance policy can provide:
Defense costs outside the limits of the liability,
Low cost deductibles (as low as $0, even!), and
Coverage of personal injury claims.
Your policy can also be customized to include an entire business owner’s package that includes general liability insurance and property insurance.
In many cases, a professional liability insurance policy can also meet the requirements your clients may have for you to carry errors and omissions insurance and protect both you and any of your subcontractors from claims of a perceived error or omission, even months after the initial consultation.
In a day and age where the business landscape is changing fast and you’re juggling more balls than ever, it’s important to make sure your business is protected. Be sure to let a professional insurance firm guide you through the choices.
By Daniel Austin