Are you looking to develop a risk management strategy for your business? Insurance is one of the most effective tools at your disposal.
What Is Professional Liability Insurance and Why Is It Necessary?
However, there isn’t a one-size-fits-all solution when it comes to business insurance. There are several types of business insurance policies you can or should buy.
They include property insurance, business interruption insurance, and professional liability insurance.
In this article, our focus is on professional liability insurance.
So, just what is professional liability insurance and how can it help your business?
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Read on to find out.
What Is Professional Liability Insurance?
Professional liability insurance (PLI) is designed for people or businesses that offer professional services such as accounting, healthcare, legal representation, or fitness training.
It protects them from claims of negligence or malpractice that might arise from their clients.
If you’re a physician, for instance, a patient can sue you if they have reason to believe you misdiagnosed them when they were under your care.
Or they may sue if they believe you operated on the wrong body part, prescribed wrong medications, or performed unnecessary surgeries.
If you’re liable, you’ll typically be required to compensate them. When you have PLI, your insurer will issue the compensation on your behalf.
General Liability Vs Professional Liability Insurance
Like professional liability insurance, general liability insurance also protects businesses from claims filed by clients/customers. But why is it necessary to purchase professional liability insurance, often in addition to general liability insurance?
The difference is in the risks they cover. General liability insurance covers physical risks that a business incurs in its everyday operations. Physical risks can include bodily injury and property damage.
Let’s Say You Run a Fitness Center
A client can sustain a bodily injury as a result of improper fitness instruction. As this website confirms, bodily injury can also occur if they use fault equipment in the fitness center.
Professional liability covers the former while general liability covers the latter.
Why Professional Liability Insurance Is Necessary
It’s not a legal requirement to purchase professional liability coverage, so you might want to skimp on it.
However, it’s super important to get this coverage.
Professional liability insurance will cover your legal costs if a lawsuit is brought against you or your business. Keep in mind that whether the suit has merit or not, you’ll still need legal representation, which costs money.
If a lawsuit succeeds or you opt to settle with the claimant, PLI will cover the cost (or a part of it depending on your coverage amount) of the settlement.
Also, you’ll have great peace of mind. Knowing that you and your business are protected against the costs of liability claims is priceless. You’ll be in a better position to focus on your job and enjoy it.
Get Professional Liability Insurance
Now that you have an answer to “what is professional liability insurance?” and its major benefits, it’s time to start shopping and get insurance. Remember to pick a reliable coverage provider.
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