As my old boss used to say "General Liability Insurance is like a Biscuit (everyone likes biscuits, but when you open them up there are holes & crevices everywhere). Professional Liability is like the Gravy that you pour on top of the biscuit that fills in the holes & crevices - and makes it so much better!!"
While every business owner knows about the need to carry General Liability Insurance, Workers Comp Insurance if they have employees, Commercial Auto Insurance if a vehicle is being used for work & Property Insurance for any property that is being used for business purposes, there are 2 types of insurance that often go under the radar. Pollution Insurance & Professional Liability Insurance. This article will focus on the latter.
Professional Liability is often called Errors & Omissions Insurance (or Malpractice for some fields). This type of insurance covers you & your company if there is a mistake made in your professional services that causes financial loss to a 3rd party. While most business owners assume Professional Liability is only for Lawyers, Doctors, Architects, Therapists, Accountants & other similar Professional occupations, the fact is that Professional Liability Insurance is an important coverage for almost every single type of business.
Business owners & employees of your business are people & people make mistakes. Professional Liability insurance helps by covering claims of:
Negligence
Misrepresentation
Inaccurate advice
Even if you didn’t do anything wrong, your client can still sue your business if they believe you made a mistake. Without coverage, you’ll have to pay expensive legal defense costs out of pocket.
Professional Liability Insurance is not meant to cover Bodily Injury or Property Damage to your clients (General Liability covers this) or if an employee gets injured on the job (Workers Comp covers this). BUT - Professional Liability covers so many other types of potential claims. Below are some claims examples:
Tree Trimmer - Sued by the client's neighbor after cutting down the wrong tree in the back yard. While the trees were right next to each other this created a privacy issue with the neighbor & ultimately the Tree Trimmer was on the hook for $120k worth of defense costs & legal fees.
Daycare - Sued by the parents of a toddler for failure to supervise correctly. The child swallowed a rock & had to get emergency surgery to remove it. Since there was bodily injury in this case, the daycare assumed their General Liability coverage would kick in. However, their failure to supervise correctly was considered an intentional act (which is almost always excluded from the GL Policy). This resulted in their Professional Liability Insurance Policy picking up the bill for a financial loss of $74k to the Parents due to medical bills.
Give SBW Insurance a call today to discuss if your business has a need for Professional Liability Insurance.