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.
When it comes to purchasing professional liability insurance, there are several factors to consider. There are per occurrence limits and an aggregate limit, and these limits will determine how much your policy will cost. The premium for professional liability insurance will also depend on several factors, including the type of business and the amount of coverage needed. A licensed insurance agent can help you determine the limits of your policy and the amount of premium you need to pay. You can also consider paying in full upfront for your policy, which may result in a small discount.
Professional liability insurance costs vary based on the profession and the level of risk involved. However, a typical policy will cover damages and defense costs up to $1 million. This means that if you make a mistake that damages another person or property, you could be responsible for paying thousands of dollars in damages. The amount of coverage will depend on the profession that you work in, so if you’re an architect or an engineer, you’ll probably need more than that.
While it’s possible to save money on professional liability insurance by incorporating your business, you should check the deductible before purchasing coverage. You should have professional liability insurance at the same time as your business owner’s policy. It’s a necessity to protect your assets in the event of a lawsuit. While it is tempting to assume that incorporating your business will protect you from lawsuits, in reality, this will not protect you from a lawsuit. In the event that your clients file a lawsuit against you, your business could become bankrupt or forfeit its assets.
If you’re working as an engineer or architect, your professional liability insurance premiums will be higher than if you’re a landscaper. This is because professional liability insurance for architects and engineers costs more than accountants and landscapers. You should also consider where you’re located, as a high risk location will likely have higher costs for E&O insurance. If you’re a federal employee, the premiums will be higher as well.
The policy deductible you choose can affect your premiums. The deductible is the amount you agree to pay yourself before the insurance company pays for your claim. If you’re looking for the cheapest policy, you’ll need to consider the deductible. A higher deductible will lower your premiums, while a low deductible may lower your cost. InsureGood clients also get the benefit of a Loss Prevention program and Human Resources support.
The premium for Professional Liability Insurance is determined by several factors, including the size of your company. For example, companies with a storefront will face more risks, such as property damage or advertising injury. Higher policy limits will make your premiums higher, but they also cover more claims. In addition to the policy limit, you need to consider whether your business is high risk or low risk. A high-risk business has a large footprint and heavy foot traffic. The higher foot traffic means more potential for injury. You should also consider whether you have employees handling other people’s property. A high-risk business will be more costly than a low-risk one.
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.