Protect yourself from costly mistakes.
Professional liability insurance provided by Rue Insurance.
Professional liability insurance, also referred to as Errors and Omissions liability insurance, protects any business that gives advice, makes educated recommendations, designs solutions, or represents the needs of others. We’ll design coverage that will help ensure that one simple mistake does not cause financial devastation.
When general liability insurance isn’t enough.
You’d be forgiven for thinking that general liability insurance covers every liability risk you face, but that could be an expensive mistake. This is where professional liability insurance comes in.
What is Professional Liability coverage?
Professional Liability, which is also known as Errors and Omissions Insurance, protects you and your business when mistakes happen. If a client believes that a mistake on your end resulted in a financial loss for them, they can sue you. Professional Liability is most commonly used to protect your business against claims that fall under one of three major categories: negligence, misrepresentation, or inaccurate advice. Professional Liability protects your business by covering the legal defense costs associated with those claims. It is important to note that even if you are not at fault whatsoever and did nothing wrong, a client can still sue you and your business if they think you made a mistake which led to a financial loss for them. Without Professional Liability Insurance, you would have to pay those expensive defense costs out of your own pocket.
What type of businesses typically need Professional Liability coverage?
This coverage is most popular amongst consultants, accountants, and technology professionals, but is important to have for any business that gives advice to their clients or offers a professional service directly to a consumer. Many business owners believe situations like these would be covered under their General Liability Insurance; however that is not the case.
With some policies, it also involves unintentional violations of copyright and other intellectual property law or defamation such as libel. For companies that provide advice, professional liability insurance is essential. But, it can also prove to be very useful for companies that supply software and similar tools that clients might then use for their own businesses.
Example of Professional Liability Coverage (Claim Example)
Let’s say you own an IT consulting business. You advise one of your clients to adopt a new piece of software that will help streamline their business operations. However, upon integrating this software into their network, a mistake in coding causes the software to overwrite all of the client’s previous purchase orders. Repairing the lost data costs the client thousands, not including the lost time that the system was down to complete the repairs. As a result, they file a suit against you for the cost of the repair and their lost revenue. Your Professional Liability insurance policy would help cover the costs associated with the claim against your business.
It is important to have professionals like our staff here at Rue, complete an in depth policy review to help make sure your business is properly protected. Contact us by calling us at 609-586-7474 or by filling out the form below.
Professional Liability Insurance Information Request
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