Professional Liability Insurance

If you are providing advice, consultations, or any professional services by contract, you need this coverage. If you recall, General Liability Insurance only provides Property Damage & Bodily Injury Coverage. Make sure you obtain Professional Liability Insurance to avoid any gaps in coverage.

This policy will defend you up to the policy limits if you are sued for failure in providing professional services by contract. Remember you can be sued even if you did nothing wrong, Professional Liability Insurance will step in a protect you regardless of fault. Some examples of potential claims would be: 1. A web designer failed to deliver a website by the contract end date and was sued. 2. A business consultant was sued because the training program he provided to the client did not meet the expectations of the client.

This will depend on the size of your business. The basic rule of thumb would be a multiple of your annual gross sales/revenue. Pay attention to what deductible you have as well. Most Professional Liability Insurance policies have a $1,000, or $5,000 deductible. Make sure you choose a deductible that you could afford in the event of a claim.

The cost will be associated with gross income, industry type, and how many employees need to be covered. Typically, the average premium range is $900-$1500 a year, for $1,000,000 of coverage. The cost is minimal, compared to the risk of not having it.

We always recommend working with an experienced commercial insurance agent. This coverage is complex and requires someone who is familiar with your industry to make sure you are properly covered. Be wary of any agent that will let you settle for just a General Liability policy. This basically means the insurance agent is willing to leave you unprotected, for the sake of making a sale. If you hear an agent say “you don’t need this coverage”, run in the other direction!