If you own a business that sells services or products to the general public, you want to do your best to ensure what you offer is of the highest quality. However, you’ll also need to protect your business with the proper types of business insurance. Most businesses will need a host of different insurance policies, and one of the most important is liability insurance. Unfortunately, in some cases, standard liability insurance policies are going to have gaps in them, and they may not cover every instance where legal action is taken because of a failure of the products or services your business offers. For that reason, to reduce your liability and risk, professional liability insurance is something you’ll want to consider.
Professional liability insurance is also known as errors and omissions insurance coverage. For the average onlooker, these policies may seem to overlap in coverage, but professional liability insurance offers a bit more extensive coverage than a standard business liability policy. For example, if you’re a software developer, and you develop a piece of software that doesn’t work quite like advertised, this poses a legal risk for your company. If a consumer who is simply angered by your software’s shortcomings files suit against you, your general liability insurance wouldn’t be triggered because the product didn’t cause physical harm or personal injury. This would leave you without coverage for the lawsuit filed against you and your business. A professional liability insurance policy, on the other hand, would offer protection against such instances.
In addition, should the person using your product suffer financial losses because of the failure, general liability insurance wouldn’t be useful. It wouldn’t offer the type of coverage needed to compensate the user for any financial repercussions or interruptions in their business. A professional liability insurance policy or an errors and omissions policy would offer your business the coverage needed to meet those financial obligations.
This is just a brief description of what this type of insurance provides. If you’re getting ready to open a business, or you already have a business but don’t have a professional liability insurance policy, it’s best to speak with your insurance provider immediately. They can answer all your questions regarding professional liability insurance, what levels of insurance you need and how much this policy is going to cost you.