| Professional liability insurance |
| Written by Henry Johnson | |
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You've worked hard to build your business, sacrificing time with family and taking calculated financial risks to strive for success. Why let just one little mistake or a freak occurrence destroy your years of hard-work and clean out your bank account? You can protect your business and financial security by obtaining professional liability insurance . Professionals who operate and own their business need professional liability insurance coupled with an in-home business or business-owner's policy to protect their assets from lawsuits that may be filed against them by unhappy clients. A general liability insurance policy provides only for claims regarding bodily injury, personal injury, property damage, or advertising injury. Professionals, such as doctors, lawyers, accountants, etc. are expected to have extensive knowledge and expertise in their particular field. As such, they are expected to perform the services for which they were hired according to the standards of conduct in their profession. If it can be established in a court of law that these professionals did not use the degree of skill expected of them, they can be exposed to damage claims if this causes harm to another person or business. Common claims alleged in errors and omissions lawsuits include misrepresentation, negligence, violation of good faith and fair dealing, and inaccurate advice. For example, if a financial services software product doesn't perform properly, this failure may not result in actual physical damages, personal or advertising injuries, so these type claims may not be asserted. The failure of the software may, however, directly cause financial losses to its buyer which might be attributed to the software developer's untruthfulness concerning how the the product would function. Professional liability insurance generally falls into four categories, employment practices liability insurance, directors and officers insurance, errors and omissions insurance and group personal liability. Errors and omissions policies are the most common type of professional liability insurance policies. protects your company from claims if your client holds you responsible for errors, or the failure of your work to perform as promised in your contract. Coverage includes legal defense costs - no matter how outlandish and unfounded the allegations may be. E&O policies will pay, up to the coverage limits on your policy, for any resulting judgments stemming from an E&O suit. Employment practices liability insurance is a fairly new insurance product. It provides protection to employers against claims that may be made by employees, former employees, or prospective employees. Employment practices liability insurance covers claims based upon age, sex, race, disability, etc. discrimination, wrongful termination of employment, sexual harassment, and claims based on employment-related actions. This coverage is of particular value to new companies, who may not have established hiring and firing practices. Directors and officers liability insurance, or D&O insurance, provides coverage for the directors and officers of the company if they are sued and claims are made regarding how they performed their duties. In general, a D&O policy is basically an E&O policy for management. Group personal excess liability provides a comprehensive benefit for key personnel, managers, and employees. Group personal excess liability provides personal liability coverage for each employee in a defined group, and helps to assure that the personal assets of these key personnel are protected. In short, this keeps you and your employees personal property safe from claims against the company. Our society becomes more litigious by the day, and today three in five employers can expect to be sued at some point. Purchasing professional liability insurance is a prudent step to minimize risks to the integrity of your business that can come about due to ordinary day-to-day operations. |
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