A Quick Guide to Professional Liability Insurance in California

Also known as Errors and Omissions (E&O) Insurance, professional liability insurance covers your business against claims of negligence related to your professional services. This policy is ideal for businesses that provide professional services or offer advice/ consultations to their clients. It covers the business owner in case they are sued for not meeting their client's expectations.

Professional liability insurance is a specialty coverage and is therefore not offered as part of home insurance or business owner's policies.

Who Needs Professional Liability Insurance?

This policy is ideal for professionals such as lawyers, doctors, and accountants as it protects them from potential claims of negligence brought by unsatisfied clients. Professionals with expertise in a particular field require professional liability insurance to cover them from claims resulting from malpractice, misrepresentation, and negligence.

What Is Covered by Professional Liability Insurance?

A standard professional liability insurance policy will help you cover:

• • Work-related mistakes and oversights
  • Missed deadlines
  • Breach of contract
  • Claims of negligence
  • Failure to deliver services on time

What Is Not Covered

The following are a few instances that will not be covered by this policy.

• • An employee gets injured on your business premises
  • Claims of sexual harrasment, workplace discrimination and other employee-related disputes
  • Claims of false advertising such as exaggerating your work experience or your college education
  • General liability claims such as when a client trips and falls at your workplace
  • Intentional misconduct such as not responding to your client's mails or not returning calls

Examples of Situations That Might Lead to Professional Liability Lawsuits

• • Failure to provide adequate information to client resulting in financial damages
  • Clerical errors either in contracts or shipping addresses resulting in miscommunication and delayed work
  • Failure to accurately describe your services, products and prices or misrepresenting them to your clients

How Much Does Professional Liability Insurance Cost?

The cost of your policy will depend on several factors, including:

• Coverage limits- the more the coverage, the higher the cost of insurance
• Deductibles, if any- if you pay more out of pocket (deductible) before the coverage kicks in, you will have to pay lower premiums
• Size of your business- the bigger the size of your business, the more the possibility of mistakes, therefore the higher the costs of insuring it

Generally, the greater the likelihood of a professional act of negligence/mistake, the higher will be your professional liability insurance costs. Insurers often take into account your claim history, that is, if you have filed several claims in the past, chances are you will be charged a higher premium.

When you are in the market for professional liability insurance, call the reputable agents at CF&P Insurance Brokers. Our experts understand the importance of protecting your business and its assets. We also understand the complexities that are involved in insuring you against potential mistakes and errors related to your professional services. Schedule a consultation with one of our experienced agents, and you will get the answers you need. Contact us today!

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