Why Your Business May Need Professional Liability Insurance.
Business owners in Chicago who turn down professional liability insurance take on the risk of a possible lawsuit if one of their projects goes amiss. Here’s a look at how a professional liability insurance policy can help.
What is professional liability insurance?
Professional liability is the coverage that protects you or your business from a mistake in a service that you provide, a promised service you have failed to provide, or a service that did not have promised results. Telling by the name – errors and omissions, professional liability provides coverages for errors in your work.Common professional liability insurance policies cover expenses that arise from a lawsuit such as defense costs, settlements and/or judgements. A lawsuit can be devastating for your small business.
Does your business need professional liability insurance?
If a function of your business is to provide a service to your client for a fee, your business has an errors and omissions exposure. Professionals in the following industries should definitely consider professional liability insurance:
- Beauticians & Barbers
- Business Trainers & Coaches
- Personal Trainers
- Real Estate Agents
- Travel Agents
Example. An employee at your beauty salon accidentally spills a hair chemical treatment resulting to severe burns to the face of the client.The client sues for bodily injury, emotional distress and may claim loss of income from time spent out of work.
Another example. As a wedding planner, you schedule the photographer and florist for May 13th instead of May 3rd.Imagine the bride’s saddening experience come wedding day with no flowers or photos.The client sues for emotional distress.
Professional liability insurance coverage will protect you, your employees and your business by covering defense costs, as well as possible settlement rewards for claims resulting from negligence in the professional service you provided.Whether or not these claims have grounds for a lawsuit, the time and fees spent on defense will be costly.
How much does professional liability insurance cost?
Professional liability insurance can sometimes be added to a business owners package policy, or BOP. BOP is a cost-effective, bundled package insurance policy. This policy can include more common coverages popular to small businesses such as general liability, property, business interruption, and more. Adding professional liability coverage to a BOP is the most cost effective approach to buying an E&O policy.
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