Operating a business comes with significant risks. You can be sued at any moment. That’s why it is important to have protection in place. As you look over your commercial insurance policy, consider professional liability insurance.
Professional liability insurance protects your business against claims that you performed harmful and negligent acts while providing service. Professional liability insurance is essential coverage regardless of whether you are running a traditional business, are self-employed, or impart training. A potential malpractice suit could ruin your reputation and your professional career. Defending your name could also lead to a financial crisis as the legal process plays out. Obtaining professional liability insurance is the easiest way to protect your personal and professional assets.
Find an extensive policy
As you look for coverage, don’t assume that the cheapest policy is the best. Cheap policies often provide limited coverage. The policy may exclude any errors that occur while working in a high-risk situation. Some policies only cover the defense of claims filed by a customer and avoid third-party claims. That’s why it’s important to look over the policy’s terms carefully. Possible policy exclusions include sexual misconduct, criminal and fraudulent acts, computer acts, identity security, and conflict of interests.
Select a provider with a strong reputation
Look for an insurance company licensed in every jurisdiction, ethical, financially stable, and offers excellent customer service. Ask your peers and people you trust for recommendations. Contact local professional associations to see if they have any endorsements. Look for endorsements that highlight a company’s specific benefits and strengths.
Choose a policy that aligns with your risk level
Your professional liability policy should pay out a million dollars at minimum for an incident. If you’re providing service in an area with a high likelihood of lawsuits or complaints, you should consider adding more coverage. If you are practicing in a high-risk legal environment where criminal cases are popular, you should also add extra coverage.
Also, beware of policies that have legal costs inside the policy limit, as drawn-out lawsuits could deplete the limit prior to the settlement or penalty.
Purchase your own coverage
If you are insured through an employer, consider purchasing your own coverage. This ensures that you are fully protected if an issue of malpractice arises. Employer-based coverage is designed to protect everyone as a whole, not individual cases. The policy limits may not be enough to protect you. Individual policies have broad definitions of coverage and have relatively fewer exclusions.
Consider your unique situation
Malpractice policies are available in two types. Occurrence policies are more expensive but are easier to adhere to. These policies cover any errors that occur during a policy period. Claims-made policies don’t provide coverage once a policy ends, making them more complex. If you switch carriers, you’ll have to purchase an extended reporting period in order to stay protected. You can also inquire about prior acts coverage, which allows your new carrier to cover you from any claims made against you regarding previous work.
Consult with Lou Aggetta Insurance Inc.
Professional liability insurance gives you a safety net against potential accidents. Without this form of coverage, you may go into debt, fighting to protect your name against potential allegations. If you have any questions regarding commercial insurance, contact the team here at Lou Aggetta Insurance Inc. today.