Small business owners often work to keep costs low and make the most of their assets and resources. It can be tempting to skip over professional liability insurance, but this coverage is vital to ensuring long-term success and avoiding financial failure. Professional liability insurance for small businesses is a critical form of coverage for any small business owner who provides a professional service or advice to clients or needs professional liability insurance to complete a contract, event, or other partnership.
Certain insurance products are very well suited to small businesses. If you can offer these lines to your small business clients, you will fulfill a customer need while improving your business offerings. Help your clients by explaining what professional liability insurance for small businesses does and why it is so beneficial for a small business.
The Basics of Professional Liability Insurance for Small Businesses
Many small business owners do not know the exact details of what professional liability is and what professional liability insurance for small businesses covers. Professional liability refers to the risk a business faces in delivering professional services. Professional liability insurance is often known as errors and omissions or indemnity insurance, which gives a good clue as to what it covers. It protects a small business and its owner if the business/owner is sued for negligence, whether or not there was actual negligence. The insurance also covers defense costs up to policy limits.
It’s important to explain the distinction between professional liability insurance for small businesses and general liability insurance. Professional liability insurance will not cover claims like bodily injury or property damage. It’s essential for your clients working in professional services to have both types of coverage, which we offer at Prime Insurance Company.
Why Small Businesses Need Professional Liability Insurance
Liability lawsuits are common and expensive, both for small businesses and large corporations. One study shows that 22.2% of small businesses experienced client complaints or contract disputes in 2016, just one snapshot of how prevalent these situations are. Client complaints and contract disputes can turn into pricey litigation, the cost of which can completely devastate a small business. While larger companies have assets and resources like big budgets and top-notch legal retainers, small business owners are typically running their operations on a much smaller scale.
Professional liability insurance pays for legal expenses, even when a lawsuit is frivolous. From the cost of hiring a lawyer to paying for expert witnesses, administrative costs, court costs, and even settlements, insurance means that if a claim is successful, the business owner does not have to pay these fees out of pocket. The cost of coverage is far less than the cost of a potential claim and may be far less than what your potential client is expecting.
While exploring the benefits of professional liability for small businesses, remind your clients that lawsuits, even if without merit, impact the value and reputation of a small business with the potential to cause serious profitability problems. Being able to vigorously defend against a negligence suit is important to protect against these ramifications.
It’s also important for your clients to know that if they need professional liability insurance for small businesses, they need it now. Typically, for the claim to be approved, the policy needs to be active when an incident and ensuing lawsuit occur. Small business owners should access professional liability insurance as soon as possible and keep it going throughout the life of their business.
Work with Prime Insurance Company to Write More Business
Being able to write professional liability insurance for small businesses, tailored to their specific needs, will help you do more with your business. Prime Insurance Company partners with our insurance producers to improve coverage offerings. We will not compete with your current markets but rather, work to write the business that others won’t so you can expand what you do with our help.
We also get this done by acting as a backstop to other markets’ exceptions. Known for providing coverage where it has been excluded in the past, we manage risk well. We find solutions for producers with clients who require flexibility and determination to access coverage. This means you can be more competitive, jumping in to write insurance that comes with fair and fast claim servicing, where other insurance producers have backed off. We’re here to make it happen.
To get a quote for professional liability insurance for small businesses, use our online form, give us a call at 800-257-5590 or contact us at firstname.lastname@example.org. You can also get in touch with us or stay updated via social media. Visit our profiles on Facebook, LinkedIn, Twitter, YouTube, and Instagram.