Professional liability risk management gives your business a critical safety net. General liability risk management only covers claims that stem from bodily injury, property damage, advertising injury, or personal injury. Errors and omissions (E&O) risk management (as professional liability risk management is commonly known) provides added protection against claims of misrepresentation, negligence, good faith violations, and error or failure to offer a service or render an opinion.
What Does Professional Liability Risk Management Cover?
Errors and omissions risk management can be customized to meet the specific needs of your business. Professional liability risk management policies cover court costs, attorney fees, judgments, and settlements. Extended litigation can drain your company’s reserves, even when a claim is unwarranted. E&O risk management can help protect your company from financial disaster when another entity files a civil lawsuit against you for acts of negligence.
Professional liability risk management policies contain “shrinking limits,” which means that when defense costs are paid by the insurer, it reduces available policy limits. As defense costs can mount up with extended litigation, it may be necessary to purchase additional limits.
Who Needs Professional Liability Risk Management?
Accountants, attorneys, real estate brokers, consultants, and others need E&O coverage. You should consider a professional liability risk management policy if your business:
- Provides professional services
- Gives advice to clients on a regular basis
- Needs professional liability coverage to complete a contract with a client
Cost of Professional Liability Risk Management
There is no one-size-fits-all professional liability risk management policy. Premiums vary from company to company based on factors such as type of professional services provided, company revenue, number of employees providing professional services, and company loss history. An agent with experience at CoverOrigin LLC in Worcester, Massachusetts, is equipped to fashion an errors and omissions policy fitting your needs.
