Liability concerns can keep a business owner up at night. Substantial legal fees and settlement payments can pull your business under to the point that it may never recover. Professional liability insurance is a must to protect your investment from unwanted claims.
What Does Professional Liability Insurance Cover?
Professional liability insurance protects professionals, such as lawyers and accountants, against claims of negligence or misrepresentation that is initiated by clients. Most general liability policies won’t cover these issues.
Listed below are some professional liability claims examples.
- Accounting – The accountant assigned to work on a particular project sets the investment up as a corporation when it should have been classified as a partnership. The client sues for losses from tax liability.
- Technology – A software company develops a software package for a manufacturing company’s time clock, but it doesn’t function properly. When workers are paid incorrectly, it results in expensive recovery costs. The manufacturing company sues the software company for expenses and damages.
- Real estate – The leasing agent for a building misrepresents the compliance codes when selling to a real estate agent. When significant upgrades are required because of the error, the leasing agent and the building owner are sued for misrepresentation and expenses.
In order to protect your business against these types of claims, it is essential that your insurance policy includes professional liability coverage.