Any person offering a professional service faces the risk of liability claims. Such claims arise in the event of a breach or alleged breach of contract resulting in injuries, damages, and loss of finances. So, are professional liability insurance covers worth the investment?
Protection from Costly Mistakes
Primary, professional liability insurance provides coverage for acts of commission and omission. Irrespective of how cautious one is, mistakes can always occur. For instance, a doctor can provide a wrong diagnosis, and an investment consultant may give erroneous information. Such errors are often unintentional and not always avoidable. If the professional involved did not have a criminal intention, the insurer meets the cost of arising claims.
Protection for Business Name
Professional liability cases pose a significant threat to the reputation of a business. Broadly, a lawsuit is likely to provide negative publicity. More so, failure to pay liability claims may dent the image of a business as a reliable entity. As a result, a business can lose its longstanding market share and relationships with customers, suppliers, and service providers. Hence, having professional liability insurance cover reduces the risk of litigation through a negotiated settlement. More so, the cover can pay for defense costs, allowing a business the opportunity to defend false claims. Besides, the insurance company can pay for a public relations firm as part of a supplementary payment to manage highly scandalous incidents.
Protection of Income
The most significant benefit of professional liability insurance is the protection from loss of earnings. Typically, the investigation of an alleged claim can result in the temporal closure of the business. In such a situation, a professional would lose money from revenue-generating activities. More so, the time and energy needed to defend yourself from a claim come as an opportunity cost of making money. For that reason, the insurer provides reimbursement for such expenses to protect the policyholder's income.
In the event of professional misconduct, one may face legal proceedings. Such litigations come before a court or a quasi-legal administrative body. Ordinarily, defending yourself in such processes can be a costly affair. Consequently, the professional liability insurance cover caters to the legal fees of putting up a spirited defense. More so, the cover may pay for legal expenses incurred during an appeal process. As a result, the cover helps one to access legal representation in court and disciplinary proceedings.
All in all, professional liability insurance protects your profession, reputation, and income in the event of misconduct claims. Engage an insurance broker or agent to access a wide range of benefits associated with professional liability insurance.