Does Your Small Business Need Professional Liability Insurance?

Owning and operating a small business can be an exciting and rewarding venture. However, small businesses may often lack the financial resources and rainy-day funds of their larger counterparts. Appropriate risk management and loss control efforts may be of particular importance for companies with limited resources. Understanding your small business’s risks and exposures and securing appropriate insurance, such as professional liability coverage, is critical.

What Is Professional Liability Insurance?

Also known as errors and omissions insurance, these policies can form an essential pillar of your company’s business insurance portfolio. Like many types of insurance, these arrangements establish contractual agreements between you and an insurance carrier. In exchange for regular (e.g., monthly or quarterly) payments, known as premiums, you can request financial assistance following for covered incidents and situations.

Why Might My Company Need This Type of Coverage?

Professional liability insurance is often necessary and even legally required. For example, health care companies and professionals are typically required to maintain coverage, although policies may be referred to as medical malpractice insurance in the medical industry. Aside from formal obligations, many types of businesses, such as consultants, financial advisors and contractors, may find an adequate professional liability insurance policy to be one of the most important investments they ever make.

Lacking sufficient professional liability coverage could mean paying out of pocket for legal expenses and losses should a client or other party sue your company for allegedly being at fault for their losses. Specifically, your policy may be critical if you need to respond to the following types of accusations:

• Professional errors
• Incorrect advice
• Misrepresentations
• Omissions
• Negligence
• Missed deadlines
• Breaches of contracts

As a small business, even a single accusation of which you are eventually absolved could require significant financial resources and have far-reaching ramifications for your fiscal situation and future viability. Professional liability insurance may be the difference between restoring your company’s reputation and shutting down altogether.

We’re Here to Help

Contact Legacy Insurance in Colorado Springs, CO, to learn more about professional liability coverage options near you.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.