Professional liability insurance (often called errors & omission) is something that is imperative for any professional. Obviously many people would fall into this category, such as accountants, doctors, lawyers, home inspectors, architects, etc. No matter how diligent you are, it is always possible for a client to file a lawsuit against you, for even the smallest of oversights.
There is specific insurance for doctors and hospitals, known as medical insurance, and this is perhaps the most famous form of professional coverage. However, for the other professionals, general errors & omissions insurance should suffice. It functions exactly the same as medical, as it protects you against lawsuits filed against you or your company in regards to money you cost the customer.
Many professionals mistakenly believe that general liability is good enough. However, this only covers bodily injury and physical damages. The lawsuits most professionals deal with are financially related, and therefore general liability is insufficient. On the other hand, professional insurance covers lawsuits filed against you in regards to money. For instance, if you are a CPA and you make an oversight that ends up costing a customer lots of money in taxes, they will likely look to recover their losses from you.
One thing that discourages many professionals from getting errors & omissions coverage is the costs. However, there are definitely ways to save money. Here are three tips that work:
#1) Have good quality control practices
If you have not had many lawsuits filed against you in the past, you will pay a lower monthly professional liability insurance premium.
#2) Get a lower max coverage limit
The max limit is one of the main variables that determine your monthly premiums. The higher the limit, the more you will pay every month. Just think about the absolute top dollar amount you could be sued for, and find coverage that meets those needs. Going over that will cause a substantial rise in price.
#3) Check financial statements
Obviously many insurance firms today are on shaky financial ground. For this reason, reading their financial ratings and making sure you go with a company in good shape is critical. Otherwise, they might not be able to cover you when you file a claim. You can find all this information online, as there are organizations that actually go around and rate different insurance companies based on their long-term outlook. This might not seem that important, but if you want to see your claim money, it is.
In other words, professional liability insurance is very different then standard general liability. If you are a professional, it is just about mandatory to some extent. As long as you use these three tips, you will find the right coverage for you while saving money at the same time.