As a small business owner or entrepreneur, insurance is one important way to protect yourself, your venture, and your finances. But what is the right insurance coverage? Most new business owners think about insurance in terms of being able to rebuild after a disaster or getting coverage against theft of their assets.
However, liability insurance is another vital component for all businesses. And if you fall into certain categories, professional liability coverage might just be the most important type of liability insurance. Here's what you need to know about professional liability coverage.
What Defines a "Professional"?
The first question you are likely to face is whether or not you need professional liability insurance. Are you a professional? This question seems simple, but it may not be. Some self-employed individuals and service providers can easily see themselves as providing "professional services." This commonly includes lawyers, doctors, accountants, architects, or business consultants.
But you are a "professional" if you provide any kind of service upon which your experience, training, and skill are dependent. A plumber, electrician, midwife, wedding planner, or dog trainer could be in this category. The defining factor, then, isn't what type of service you perform but rather how much clients rely on your qualifications when ordering and receiving your services.
How Does Professional Liability Differ From General Liability?
If your business insurance package already includes general liability, do you need another liability policy? The short answer is "yes" because they cover different things. General business liability covers accidents, damage, bodily injury, and similar events on property you own or when providing services. So if a dog trainer accidentally injures a dog, general liability would likely cover the vet bills.
However, professional liability covers you if someone charges that the harm wasn't caused by an accident or external threat but rather by an error you made when providing the services. If the dog owner accuses that dog trainer of teaching something that harms the dog, professional liability would cover the potential lawsuit. If the electrician is accused of wiring something incorrectly, it would be a professional liability issue.
Where Should You Start?
Do you think that your services could use coverage against professional liability? If so, start by scheduling an appointment with a professional liability insurance provider in your area today. Only when you have the right combination of coverage will your business be protected enough that it can grow and thrive for many years.