Professional Liability Insurance from B2Z is designed for your small business! Professional liability insurance is essential if you provide consulting, advice, or expertise to clients. You may be required to carry professional liability insurance depending on your profession. Clients and customers may require proof of professional liability coverage in some industries. Learn more below!
B2Z Offers Professional Liability Insurance
What Is Professional Liability Insurance?
Also referred to as errors and omissions insurance and professional indemnity insurance, Professional Liability Insurance protects businesses that provide expertise and consulting services from costs resulting from work mistakes, missed deadlines, professional negligence lawsuits, and select other lawsuit types, defense costs, libel and slander, and false advertising.
This type of insurance is usually an industry or contractual requirement. Professional liability insurance is vital for businesses like accountants, barbers and beauticians, and computer consultants.
Why Do I Need Professional Liability Insurance for My Small Business?
Professional liability coverage is designed to ease the financial burden of claims of negligence or injury made about the professional services or advice provided by your small business. Whether you are at fault or not, this coverage may provide financial relief for related losses, attorney fees, and court costs.
A few more reasons to consider professional liability insurance for your small business, keeping in mind these statistics relate to small businesses that provide expertise and consulting services to customers:
Services Employment. More than 71% of private employees (or 107.8 million people) work in service businesses.
Lawsuit Frequency. 43% of small businesses reported having been threatened with a lawsuit; in general, 36-53% of small businesses are sued each year.
Contract Breaches. 31.4% of small businesses have faced a breach of contract lawsuit, which is the most common lawsuit faced by small businesses.
Negligence Costs. $182 billion is the collective cost bore by small businesses each for negligence (tort) lawsuits. 39% of those businesses reported annual revenue of under $1 million.
Costly Settlements. 90% of small businesses opt to settle lawsuits simply to avoid higher court costs with out-of-pocket settlements wildly ranging from $3,000 to upwards of $100,000.
Industry Requirement. Professional Liability coverage may be a requirement to operate within certain industries or states or as a contract specification.
We could talk about Professional Liability Insurance all day...
We really want you to understand your Professional Liability Insurance coverage. When it comes to insurance, your small business may have unique risks that Professional Liability helps cover. Do you provide professional expertise or consulting services to your customers the way an accountant, computer consultant, or hairstylist does? If so, professional liability insurance is designed for claims arising from those types of services!
Professional Liability Insurance Typically Covers:
- Expenses related to customer claims made against the professional services or advice provided
- Actual or alleged mistakes or negligence
- Inaccurate professional advice
- Personal injury, such as libel or slander
- Claims against temporary staff and independent contractors
- Related legal costs
This seems almost too good to be true, right? There must be a catch... And, here’s a sampling of what’s not covered:
Professional Liability Insurance Typically Excludes:
- Fraudulent, dishonest, or criminal acts
- Employment practices
- Copyright, patent, or trademark infringement
- Claims unrelated to your expertise (typically covered by BOP)
Professional Liability Insurance Frequently Asked Questions
Simply stated: you pay premiums based on your coverage selections and business details on behalf of your small business monthly or annually. In exchange, the insurance company agrees to pay claims and associated expenses covered by the policy. Your policy documents are the legal contract between your small business and the insurance company.
Many different types of businesses benefit from having Professional Liability insurance. These include real estate businesses, law offices, insurance agencies, healthcare agencies, financial services offices, general contracting, IT consulting, architect offices, beauty salons, and more! Something as simple as an error on an order form might lead to a lawsuit. Professional Liability Insurance helps cover that!
You might wonder, does every business need professional liability insurance? Really, any kind of business that offers advice, services, or products that depend on professional training needs Professional Liability Insurance.
Professional Liability Insurance covers expenses related to customer or client claims made against the professional services or advice provided by your company, such as negligence, inaccurate professional advice, personal injury, and related legal costs.
What is covered by this coverage will be fully detailed in the policy documentation.
Typically, a professional liability policy does not cover the following: criminal acts, employment practices, copyright or trademark infringement, and regular claims not related to your expertise.
What is excluded by this coverage will be fully detailed in the policy documentation.
Professional Liability Insurance is not required by law in all states. It is an optional type of coverage, though to operate within certain industries or states, or as a contract specification, it may be required.
Professional Liability Insurance and General Liability Insurance provide different coverages for a small business. You will potentially want both types of policies, though you may choose to obtain a Business Owner's Policy instead of General Liability depending on your unique business details.
Professional Liability policies cover work mistakes, missed deadlines, slander and libel, and inaccurate advice, and is typically sought as a coverage for businesses that provide expertise like accountants.
General Liability policies are the most common kind of small business insurance. It covers most claims concerning third parties like a customer slip and fall, and may be required in the terms of a lease or client contract.
Here's some more help!
Try our Coverage Tune-Up Quiz if you're not sure whether you need both policies.
Talk to our licensed customer experience team members and they can help you out!
Or read this helpful article all about General Liability versus Professional Liability