Medical Malpractice

The purchase of professional liability insurance is not necessarily as easy as simply realizing you need it and then calling your agent. The first step you must take is to determine what kind of coverage is right for your potential liability, your concerns and your type of business. With all the different choices out there it can be difficult to figure out what type of policy you should buy, so let's look over some of the most common options.

Industry Specific Professional Liability Insurance

The industry that you conduct business in could have its own industry-specific liability insurance requirements. For instance, those in the financial industry (in the insurance, real estate and the investing end) must have errors and omissions insurance. This insurance protects them against liabilities created if they accidentally cause financial harm to a client through an error or an omission.

Those who work in the medical industry will find that malpractice insurance is a required coverage. It protects them against claims that result from medical harm they accidentally inflict on a patient through omission of treatment or negligence.

In industries with no professional requirement for liability coverage, business owners can consider the purchase of professional liability insurance. Professional liability insurance-like the other coverages we discussed-protects professionals from liability claims stemming from neglect that causes harm to clients. It can be purchased by information technology professionals, gym owners, life coaches and others.

Non-Specific Professional Liability Insurance

There are also non-specific professional liability policies for business owners, like general liability insurance. General liability insurance primarily focuses on property damage or bodily injury sustained resulting from the operations or premises of the business. This differs from the industry specific coverage discussed above because it does not concentrate on the unique needs that arise due to professional services provided.

Professional indemnity insurance is another outstanding choice for the savvy business owner. If your business is sued for slander or libel or for breach of contract and damages, then professional indemnity insurance would help you protect your assets and keep your business running while paying the claim.

Personal versus Professional

Another confusing aspect to professional liability insurance is the overlap people feel they have through their personal insurance coverage. If you operate your business out of your home or garage and use your personal vehicle for your business, then you might think that your personal homeowners and auto coverage will cover any damage to your property or claims of injured parties as the result of accidents. Unfortunately, these claims are likely to be denied by your personal insurer and you could even risk having your policy dropped if the insurance company finds out you did not disclose your business activities on personal property. Personal risks are much different than business or professional risks and when your insurance company underwrites your policy, they must receive full disclosure about the risks involved.

Professional Liability Deductibles and Limits

No matter what types of professional liability insurance you decide are right for your business, make sure that you set realistic limits and deductibles on the policies. If you choose deductibles that are too high in order to save money on your premiums, you run the risk of losing business assets as you liquidate them to fulfill the deductible on your claims. Likewise, limits that are too low could force you out of business if an extremely large claim is awarded to someone who sues you.

Remember, your business is your present and future livelihood. It is an investment of your time, money and heart and should be protected as you would protect any other investment. Proper liability insurance coverage allows you to protect your investment and your future just by simply paying a premium.