Your limited liability company will need insurance like general liability insurance, workers’ compensation insurance, and professional liability insurance. On this page, we’ll answer the questions: what is professional liability insurance and how does it benefit you?
How Much is Professional Liability Insurance
The professional Liability Insurance cost ranges from $500 – $1,800, on an average. It varies based upon the policy features added.
Professional liability insurance is an important tool for many professionals. It helps cover losses resulting from mistakes made by a professional. The cost of this type of insurance varies with the size of your business. Some small businesses can expect to pay between $350 and $1,800 per year for this type of coverage.
Professional liability insurance is one of the most affordable ways to protect yourself in the event of a mistake. It is also cheaper than paying for the legal expenses that can result from a lawsuit. However, there are a few things to keep in mind.
In general, it’s better to get the best coverage for your money than to go with a cheap policy. The higher your risk, the more expensive your premiums. By analyzing your claims history, you can make an educated decision about what is worth buying.
A good rule of thumb is to choose a coverage level that will cover at least 10% of the claims you might be faced with. This means choosing a policy with a higher deductible. You can also save money by selecting a policy that is pay as you go.
Depending on your industry, the cost of professional liability insurance can vary. For instance, a landscaping company might not be subject to a lot of lawsuits, while a doctor might be on the hook for hundreds of thousands of dollars. Even small claims will affect the price of your insurance.
While professional liability insurance is a must for all professionals, it’s not the only type of insurance you should consider. Other types of policies include workers’ compensation, which covers mistakes made on the job. Similarly, a general liability policy can cover damages incurred from a negligent act, like stealing intellectual property.
One of the biggest costs of professional liability insurance is the deductible. Choosing a low deductible can mean paying a lower premium, but it can also mean you have to shoulder the entire cost of a claim when it comes. Choosing a higher deductible may be the wisest choice, as it demonstrates that you are willing to take on a bit of risk.
One of the best ways to reduce the cost of your professional liability insurance is to understand your risks. Having an understanding of what the industry you operate in is like can help you identify potential problems that might lead to an insurance claim.
Another way to lower the cost of your professional liability insurance is to get a policy that includes loss prevention services. These services help you avoid problems with your customers, such as poor service or a missed appointment. Also, a professional liability policy with a high deductible can lower the total cost of your coverage.
As you can see, there are many factors that contribute to the final cost of your professional liability insurance. Getting a quote that is specific to your business will help you determine the right policy for your needs.
On this page, you’ll learn about the following:
What Is Professional Liability Insurance?
Also known as PII (Professional Indemnity Insurance), the PLI or Professional Liability Insurance is designed for consultant organizations or individuals against any lawsuit filed by the client regarding the financial loss. Commonly called “errors & omissions” or E&O, PLI is helpful for professional services and advice providers or companies that are often trapped with a civil lawsuit and negligence claim by the client.
While covering the negligence claim, the insurance will give protection by focusing on the alleged loss or failure of the client due to any omission or mistake done by the consultant within the policy period. The intellectual property and other confidential data are safe with the PLI company while it analyzes everything.
Who Needs Professional Liability Insurance?
Liability insurance policy is beneficial for various business or service providers, namely architects, counselors, brokers, financial professionals, designers, IT developers, and so on. You can either go for a professional insurance cover or contractual clause issued by the clients to have liability insurance for working within the policy period.
If the business requires direct dealing with the customers, having a PLI is crucial as customers might make a claim out of their perspective even though there is no error on your side.
How Does Professional Liability Insurance Work?
Professional Liability Insurance comes with an array of features that are beneficial in different case scenarios of the applicable policy period. The key features are –
Eligible for All Professionals
Be it medical practitioners and professionals or management consultants, chartered and financial accountants or advocates, engineers and architects or designers –the PLI-covered claim is applicable to almost all the professionals as per the laws of a specific insurance company.
The professional liability policy will cover all legal liabilities due to omissions insurance, errors, and negligence while providing professional services that result in any loss or injury to the third party or damage to the property. In this context, you should also know that the insurance will only cover any claim made during the policy period and not after that.
Group Policies Granted
A professional Liability Coverage contract is also compatible with more than one person from the same company or profession. What is better, group policies come with discounts according to the number of people in that group. This will help the business owners to pay for legal liability expenses, property damage expenses, and so on.
Expenses for Defense
During your legal defense in the court against alleged errors and professional errors, the PLI will cover the fees and additional charges by paying out of your insured sum. You do not have to bear any expense for defending yourself at the court, thanks to different policies like medical malpractice insurance, defense costs, liability insurance cost, and so on.
Professional Liability Insurance is needed if you have a business. You cannot say when and how your clients can file a lawsuit against your business. In that case, if you have PLI then you might be able to cover the damage to your business. This article has explained professional liability insurance and how is it beneficial for your business.