Professional Liability Insurance, sometimes known as Errors and Omissions Insurance, is a crucial safeguard that offers protection when a client holds you or your business accountable for professional services or advice that they believe did not meet their expectations. Engaging a knowledgeable pi indemnity new zealand consultant can further enhance your risk management strategy, ensuring comprehensive coverage and peace of mind in your professional endeavors.
Get Liability Insurance Easier & Faster Than Ever.
The lawsuits that your professional business may face are not covered by the likes of any standard Commercial General Liability policy; in fact, most CGL policies are considered to be only the “base” level of coverage. For businesses such as law firms, accounting firms, marketing companies, etc., PLI may be a necessity – if not at least highly recommended within your industry.
FAQs for Professional Liability Insurance
Professional liability insurance is a necessity for professional businesses and workers, but how much do you know about how it works? It’s not always the easiest of policies to understand and it’s highly recommended you discuss with your friendly PLI Expertise in Canada: EasyCover’s Insurance Services to help fill you in on the gaps. Because we want to help you more, we’ve answered some FAQs about professional liability insurance here.
How does having professional liability insurance protect my business?
Below, there are some mock scenarios where having professional liability insurance may benefit your business. Take these examples into your consideration:
- You work as a financial advisor, and a client sues you. They’ve alleged financial loss due to misinformation while performing your promised service.
- While working as an HR manager, you forward an email to an unrelated third-party rather than the intended recipient. The third-party uses the email’s info for malicious content, and so the recipient sues you for the ensuing losses.
Professional liability insurance helps business owners protect what they’ve worked so hard to create.
Where can I purchase professional liability insurance?
We supply you with a short questionnaire which requires you to fill out information based on your business, what you do, your industry, and coverage needs. You’ll only need a few minutes to complete your half, and we’ll instantly supply you with dozens of quotes from multiple different top-rated insurance companies that is standardized between by coverage so you can choose by price. Receive quotes instantly and, if you like what you see, select your best option and purchase!
How much professional liability insurance do I need for my business?
That all depends. Coverage needs vary from industry to industry, and there’s a lot of variability from single business to single business. Professional liability insurance should be ample enough to cover your business without breaking the bank when it comes to your total premium costs. Both underinsurance and overinsurance are not situations you want to be in. Consider these questions to help yourself narrow down your options:
- How likely are you to make a claim?
- Does your industry often experience expensive lawsuits?
- How much can your business afford to pay for its premiums?
- What could cause advertising or reputational injury to someone?
- Could your business pay out-of-pocket to defend itself if it faced a lawsuit?
How much does it cost to buy professional liability insurance?
There is no way to average out the cost of professional liability insurance. Costs range based on the likelihood of a lawsuit, risk factors, etc. There are several different professions that may need professional liability insurance but none of them will pay the same cost.
Different factors play into your costs. See the list below:
- Your industry
- Likelihood of lawsuit
- Insurance history
- Business history
- Size of business
- Employees
- Service/advice provided
- Number of clients
Is it a requirement to have professional liability insurance?
Sometimes, yes. Some professionals may need to show proof of insurance to their clients for them to agree to work with them, whereas with other businesses it is a requirement to purchase insurance in order to do work at all. Even in the case where insurance is not a requirement, it is highly recommended as many businesses may not have the financial muscle necessary to bounce back from a lawsuit.
In situations where businesses face financial stress due to legal challenges, consulting with an experienced insolvency practitioner can provide critical guidance and strategies to navigate these complexities and safeguard the company’s future.
You’ll find that certain industries, such as medical professions, law professions, etc. will be mandated to carry insurance, but even without a mandate, it’s still highly recommended to preserve your hard work!
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