Who Needs Professional Liability Insurance?
Posted by on Jul 30, 2011 | No Comments »
All small business owners should carry some sort of business liability insurance. Failing to do so puts you at risk for paying all costs for any lawsuits out of pocket. Even if it is the business being sued, if you are sole or co-owner of it your personal assets can be seized as a part of a settlement. It’s only smart to purchase insurance to pay those costs for you. There is more than one type of business liability insurance, though. Commercial liability covers injury to someone else or their property. Product liability covers claims that result from a product you make and sell. Professional liability, on the other hand, has to do with professional services and advice.
If your business is simply to sell a particular product, you do not need professional liability insurance. The people who need it, also known as Errors and Omissions coverage, are those whose primary business is giving advice. Doctors, accountants, dentists and financial advisors all fall under this umbrella. If you run a consulting firm of any kind then you count. The idea here is that legal claims could arise from advice you give that is faulty. For instance, if you are a financial advisor and you suggest your client put his money in a certain stock and the stock crashes, then he may want you to pay for his losses. Medical professionals can be liable if the treatments they recommend don’t work or if they make a mistake during a procedure. E&O coverage can also cover negligence and mistakes made by any of your employees.
It is also best to consult with an insurance broker or an attorney before making serious decisions about business liability insurance. If you think you might be in need of professional liability insurance, talk to a professional.
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