Are you an entrepreneur or a small business owner? Do you feel that you spend too much of your time managing administrative issues rather than focusing on your product or service?
While we don’t want to add to your already hefty list of administrative duties, we do want to point out the importance of maintaining a professional liability policy for your business.
Small Businesses and Professional Liabilities
As a small business owner, you need to be aware of potential liabilities, and how to mitigate them. Professional liability insurance can be purchased to protect a business against incomplete or shoddy work, providing incorrect advice, errors or oversights, as well as actual or alleged failures in delivering a service. All policies are not alike, however, and the business owner needs to make sure they have the proper endorsements of coverage for their needs. Keep in mind that professional liability lawsuits can stem from miscommunication about a project scope, a delivery deadline, or an incomplete contract. They may seem like small omissions, but they can lead to serious lawsuits.
Professional liability insurance can provide coverage if a customer sues your company for failing to meet their expectations on some aspect of your service. If this happens, and you don’t have the proper coverage, your small business will need to pay related legal fees including court expenses, expert witnesses, attorney fees, damages or settlements. This type of lawsuit against your company, whether fact-based or frivolous, can easily cost a small business thousands of dollars or more.
But it’s not just the cost of the lawsuit. It’s also about your reputation. When news of the lawsuit spreads, current and potential customers may question your work. Not only can this cause you to lose current and potential customers, but other customers may decide retrospectively that they too, were not completely happy with your work. Consequently, more lawsuits may follow, putting your small business in an unpredictable and dire situation.
Professional Liability Policies
Professional liability insurance protects business owners when their knowledge, skills, or work are in dispute. These policies can help defray legal fees associated with lawsuits in the event your business fails to meet the expectations of the customer. Moreover, professional liability insurance protects you and your small business if a client brings a frivolous lawsuit.
Professional Liability Insurance is critical for professionals such as therapists, consultants, and architects because these specialized professions are subject to legal regulations.
Professional vs. General Liability Policies
Although both professional liability and general liability insurance are designed to cover business liabilities, they cover separate liabilities. Professional liability insurance does not cover general liabilities such as injuries caused on your property, damage caused to a customer’s property, or things like copy infringement, slander, libel, or misappropriation. To learn more about general liability for small businesses, click here.
As your small business grows, so will your exposure and potential liabilities. Make sure to reassess and update your business insurance policies as your business grows. And bear in mind that professional liability insurance is “claims-made” coverage, meaning that your policy must be in place at the time that a lawsuit is filed in order to receive your insurance benefits.
Putting the right insurance in place now will protect your business and financial future!
Since 1990, Goldman & Daszkal, P.A. has provided reputable legal representation to people throughout the state of Florida. The firm has helped thousands of individuals recover compensation from motor vehicle and boating accidents, slip and fall accidents, product defect and liability cases, pharmacy errors, and negligent security cases to cover medical expenses, pay bills, take care of their families, and return to work. Goldman & Daszkal, P.A. can help you get the relief you need to start living your life again after a serious injury. For a free and confidential consultation, contact Goldman & Daszkal, P.A., at (954) 428-9333. G
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