Why Professional Liability Insurance Is A Must-Have In Today ’ s World
PROFESSIONAL LIABILITY INSURANCE
Protect Your Business & Reputation
Why Professional Liability Insurance Is A Must-Have In Today ’ s World
Whether you own a large or small business , you face liability risks , and there are two types of policies you need to consider . General Liability insurance provides coverage for a broad range of claims related to bodily injury , property damage , and advertising injury . It ’ s a third-party coverage that provides protection for accidents and injuries on your business premises or because of your business operations . But if you own a business that offers services or consultations , you may want to consider adding Professional Liability insurance . This type of coverage focuses on issues such as causing financial loss to a client , failure to perform a service as promised , and errors or omissions in the service or product sold by the business .
So , who needs Professional Liability ? Short answer — an increasing number of businesses . To stay competitive in today ’ s markets , businesses have shifted their focus to provide more serviceoriented products . Professional Liability specifically covers businesses that perform consulting work , training , or work requiring special licensing or certification .
Many people believe that this type of coverage is only suitable for professionals like doctors or lawyers , while others simply choose not to buy it , mistakenly believing their General Liability policy will cover their professional service
risks . However , many service-based businesses face professional risks . For example , manufacturers are prone to liability claims for using the wrong materials ; engineers and architects are liable for flawed blueprints and designs .
Here are illustrative examples of businesses that could face a potential Professional Liability claim :
1 . A wedding planner who runs out of food halfway through a reception .
2 . A retirement advisor whose consultation causes the client to lose 10 % of their life ’ s savings .
3 . A nutritionist whose program fails to help a client lose weight as implied .
4 . A real estate agent who provides incorrect information about a listing .
Along with providing legal expenses , Professional Liability also offers reputation protection and crisis management coverage . Even when a business is not found liable , the accusations can still damage a business ’ s reputation . Professional Liability insurance will help cover the cost of hiring a public relations firm or a reputation management service . As with all insurance , there are limitations to the coverage .
Professional Liability does not cover the following :
• lawsuits initiated by the policy holder
• expenses associated with fixing the problem
• Criminal Offenses if you knowingly committed a criminal act
Businesses that offer services or advice should consider this type of policy as an investment , especially given the current litigious environment . A Professional Liability claim could produce potentially irrevocable damage to a business . +
BY : NICK D ' ONOFRIO , ASSOCIATE ADVISOR , JGS INSURANCE , A BALDWIN RISK PARTNER
Nick D ’ Onofrio entered the insurance industry with the intention to provide peace of mind for businessowners . By working closely with owners , he is able to help small businesses navigate through the complexities of the industry and provide the coverage that fits their unique needs . In providing extensive customer service and analysis , Nick is able to move insurance away from being transactional based business to a service-oriented business .
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