22 Sep Professional Liability Vs. Other Coverage: An Overview
As an entrepreneur or practicing professional, not having liability insurance is bad news. A business without it is as exposed as a house without a roof. Liability insurance is a kind of insurance that protects you from claims of damage to a third party and lawsuits due to that damage.
There are three major types of liability insurance.
- General liability insurance
In a situation where you get sued for third-party bodily injury that happens on your organization’s premises, you need general liability insurance to cover the resulting expenses. This insurance also covers damages or injuries sustained while using your products or services or third-party property damage caused by your business.
- Employers’ liability insurance
Workers injured while performing their work-related obligations may file lawsuits against their employer if they feel they have not been compensated adequately. Employers’ liability insurance provides coverage for such cases that are not covered by your workers’ compensation.
- Professional liability insurance
Also known as Errors and Omission insurance, it covers your business from claims of damages due to unprofessional conduct.
Why Do You Need Professional Liability Insurance?
According to statistics, the United States has recorded an average of USD 22.8 billion spent by businesses on lawsuits this year. There is no telling when your business or profession will be liable to damage; therefore it is best to prepare for such uncertainties and avoid costly litigations.
Benefits of Professional Liability Insurance Not Offered by Other Coverage
Apart from protecting you from claims related to professional malpractice, professional liability offers other supplementary benefits, like:
- Reimburses loss of earning
The process of attending to a lawsuit or investigating a claim may pull you away from other lucrative business activities. Sometimes the business may have to be closed for a while so that you can be present at the court proceedings– especially if you own a sole proprietorship. Professional liability insurance reimburses you for the loss of earnings in such circumstances.
- Offers Pre-claim assistance
For most insurance coverages, until an official claim is made by a third party, the insurer does not take any action in compensating the damages/loss. However, with professional liability insurance, if you suspect that an event could lead to a potential claim, your insurer may intervene and provide the financial settlement.
Professional liability insurance can be a lifesaver for your business. If you do not have a business but are a practicing professional, it is even more advisable to have this policy. At Doughtery Insurance, we offer customized insurance policies at reasonable rates to suit your unique insurance needs. Contact us today to get a quote!