Risk & Business Magazine Sterling Insurance Fall 2017 | Page 25

PROFESSIONAL LIABILITY INSURANCE By: Kevin Sweet, Sterling Insurance The Value Of Professional Liability Insurance I ndividuals who make a living from the expertise they provide to others, such as doctors and lawyers, require insurance to go beyond a Commercial General Liability policy. Who would count as an expert? Anyone with extensive training in a field: architects, engineers, most consultants, doctors, lawyers, and the like. A Commercial General Liability policy may be enough to cover general business mishaps, but it is not going to handle what may happen as a result of someone taking your expert advice and something bad happening as a result. This is where Professional Liability Insurance (also known as Errors & Omissions Insurance) comes into play. When it comes to Professional Liability, the issue is one of potential financial loss as opposed to property damage or bodily harm. According to the US Small Business Administration, a lawsuit affecting a small business could result in costs anywhere from $3,000 to $150,000. Unfortunately, there generally isn’t a requirement for individuals to have anything more than a standard business Commercial General Liability policy (sometimes not even that), so it’s up to you to decide whether or not you want to insure this exposure to loss. Generally speaking, there are three situations in which Professional Liability Insurance would help offset your costs: • Negligent Services – If your work doesn’t meet industry standards • Undelivered Services – If your finished work doesn’t meet the standards of the client, you could face a breach- of-contract lawsuit and all of the associated expenses. • Work Mistakes – Mistakes made in the course of your professional work. If a mistake or error on your part costs your client money, you could be liable for damages. When looking into your Professional Liability policy, it is critically important you give a very broad outline and description of your services. If your description is too narrow, you could be denied coverage in the event of a claim. The application process is absolutely essential to ensuring your policy will cover you when you need it. Part of that process is understanding you should never advance your retroactive date, which is the date when you first bought your Professional Liability Policy. Because if you do, claims made against you going back prior to the retroactive date, regardless of when the claim is reported, will not be covered. You worked hard to get to the position you are in. Becoming an expert in a field—any field—and attaining everything that goes along with it is not an easy or a simple task. Everyone knows they need insurance, but sometimes the ins and outs of what type can be a bit intimidating. Professional Liability Insurance is meant to cater specifically to individuals who have an intellectual aspect to the services they provide. If something goes wrong with your expert advice—which can happen to anyone—you could be liable. To find out how to offset that liability and get the ball rolling on your policy, contact Kevin R. Sweet, CPCU, ARM, LIC, at 248-762-6806 or [email protected]. + Kevin R. Sweet CPCU, ARM, LIC graduated from the University of Florida earning a BSBA with honors, majoring in Insurance & Risk Management. He continued his education by achieving the Chartered Property & Casualty Underwriter and Associate in Risk Management designations, and became a Licensed Insurance Counselor within 5 years of graduation. He is currently pursuing the Risk Fellow designation. Kevin is an experienced and skilled Property & Casualty insurance professional, (often described as an “Insurance Coverage Geek”), who effectively manages global risks for Commercial Real Estate, Manufacturing and Non-Profit clientele. Reach Kevin at [phone] or [email protected]. 25