In many cases, it does. If your company is offering a service that requires special training and certification, you don’t have to be a doctor, lawyer, or accountant to need Professional Liability Insurance. Let’s take a look at the difference between the two types of coverage and why you may need both to protect your business and keep it thriving — even if it is threatened by lawsuits. For further clarification of this subject in New Jersey, contact Blue Lion Insurance Advisors, LLC now at (732) 649-1600 or online for a free consultation.
What are the differences between General Liability and Professional Liability Insurance?
General Liability Insurance, although not required in most states, is recommended for businesses of varying sizes and types since it covers businesses for:
- Personal physical injuries (e.g. slip and falls, product defects) of clients,
customers or visitors to the premises
- Reputational harm of others, including competitors (e.g. libel, slander, defamation)
- Damage to another party’s property, including property your company rents
- Misleading advertising
- Copyright infringement
It does not, however, cover businesses for accusations of mistakes and possible misconduct by professionals.
Professional Liability Insurance, on the other hand, covers your company for harm done to clients through professional negligence or misconduct. This type of insurance provides you with the ability to recover your reputation and your financial stability if you have been accused of:
- Lack of good faith and fair dealing
- Loss of goods or capital under your care
- Malpractice (improper or negligent behavior in your profession)
- Negligence (failure to take proper care)
- Unreliable advice that resulted in damages
In other words, Professional Liability Insurance is the safety net that allows you to bounce back if you are called to account for mistakes, such as a missed deadline, failed delivery, unfinished project or breach of contract.
Businesses That Are Considered Professions
Though difficult to define, professions are jobs that require special training and credentials. The education required to be a professional need not be long or complex. What professionals have in common is that they offer a service requiring skill and that if carried out incorrectly they can cause severe harm to their customers or clients.
So, all of the following professionals, and a great many more, can be held legally liable for mistakes and wrongdoing:
- Accountants and financial advisors
- Architects and engineers
- Attorneys
- Contractors
- Engineers
- Insurance agents and brokers
- Physicians, dentists, and other healthcare professionals
- Psychologists, social workers, and other psychotherapists
- Publishers
- Real estate brokers
- Teachers
- Travel agents
- Veterinarians and pet groomers
- Website developers
- Wedding planners
Some of these industries or the clients they serve may require Professional Liability Insurance in order to move forward. Regardless, one of the significant benefits of having Professional Liability Insurance is that it covers you not only for settlements of lawsuits but for the court costs and attorneys’ fees, whether or not the verdict goes your way.
When Professional Liability Insurance Is Invaluable
The following are examples of when professionals can count on their Professional Liability Insurance to have their backs in case of troubling lawsuits:
- When an engineer’s miscalculation is blamed for causing a balcony to collapse
- When a pet groomer is sued for causing a dog’s nerve damage
- When a travel agent is sued because the recommended hotel had bedbugs
As you can see, there are a number of reasons to purchase Professional Liability Insurance.
Taking into consideration the potential repercussions of not having its protection, it is certainly a cost-effective investment.
Does Your Business Need Professional Liability Insurance? Call Us Now to Find Out
As an insurance brokerage firm with long-term experience, we have an outstanding reputation for providing our clients with friendly, efficient service and for making sure that their insurance portfolio is Blue Lion Strong™. Get in touch with us today to find out how we can help you keep your business tough and resilient.