Many business owners choose a professional liability insurance policy without ensuring they have coverage for the most important risks. In this blog post, we will look at what coverage should you look for in your professional liability insurance policy.
What Is a Professional Insurance Liability?
Professional insurance liability is an insurance policy that protects you against a claim for losses a client suffered while using your service. For example, let’s say a client hires your machine for work and then finds out the machine wasn’t in good shape. The work could not be done, and the client suffered a loss from this event. A professional liability insurance policy will protect your business against a possible lawsuit if the client files a case. Your business is at risk of losing assets if your insurance policy coverage isn’t comprehensive. Sadly, there is no legal action that can redeem or restore your assets when there is no coverage in your professional liability insurance policy.
Choosing Your Insurance Provider
Before considering the coverage limits of your insurance policy, you need to choose the right insurance service provider. The decision must be made thoughtfully after reading reviews, receiving recommendations from reliable sources, and checking whether your prospective provider is proficient in commercial law. The next thing to decide is what risks affect your business most of the time. You must know the nature of risks and the likelihood of their occurrence before settling on a coverage option.
Industries vary in terms of their risk exposure. Some industries, such as medical practitioners, construction companies, real estate brokers, insurance professionals, and accountants, amongst others, have lots of unique risks. The nature of the risk and the number of risks you need coverage for will always influence the cost of your premium. Nevertheless, focus on the security that comes with insuring these risks rather than the cost of premiums.
The Reality of Professional Liability Insurance
In reality, there are two types of professional liability insurance. These are occurrence and claims-made insurance policies. The former provides coverage for events that happen when your policy is active. The latter provides coverage for claims that are made regardless of whether your policy is active or inactive. Depending on the nature of your industry, you can choose an occurrence or claims-made policy. Most businesses stick with the claims-made policy, especially because the procedure for filing claims is easy and direct.
Before you append your signature on the necessary documents that secure your insurance with a service provider, make sure you go through the limits and the exclusions of your policy. Usually, a professional liability insurance policy does not cover employee injury or lawsuits, employment practices, business property damage, vehicles, intentional acts, and criminal acts. On average, a professional liability insurance policy should cost at least $710 annually or more, depending on the nature of risks and additional coverage provided.
Do not stress over what your professional liability insurance covers or does not cover. To learn more about which policy works best for your business needs, contact the experts at Phocus Insurance Services in Phoenix, Arizona today. We are ready to assist you with all of your coverage needs.
