How Much Professional Liability Insurance Do I Need?
As a general rule, your professional liability insurance policy will protect your firm’s financial and reputational assets in the event of a lawsuit. However, this may not be enough to cover every type of risk your business is exposed to, which is why it’s crucial you read the policy for yourself.
Most policies cover the performance of professional services by those insured. However, the policy will list exceptions to this coverage, and you need to clearly understand what these exceptions are and whether or not they impact your business. Are certain specialties your firm offers excluded? If so, the policy is not a good fit. You need liability coverage that covers all services your organization provides.
So what if you should discover your current coverage is a poor fit for your professional needs? Either choose a different policy or ask your insurance provider to add a coverage provision onto your existing policy for an additional cost.
Your professional liability plan needs to account for your business’s size, scope, location, history of claims, coverage levels, and deductible cost. Remember, an insurance plan that doesn’t fit your business is of no use to you. Additionally, make sure you review your coverage on a regular basis to make sure it keeps pace with any growth or changes your business experiences over time.
Next, take a closer look at who is covered by the professional liability policy. You want a policy that covers all employees or contractors who perform services for your business. Remember, if one of your workers makes a mistake on behalf of a client and the client sues, your firm is liable if the insurance policy does not cover the employee who made the mistake.
Finally, consider the dollar limit on the policy (which limits how much the policy will pay for any individual claim). The higher the limit, the higher your costs will be, so choose a dollar amount that is in line with your business risk.
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