What Small Business Insurance is Available for Professionals?

Professional liability insurance (PLI) is a form of small business insurance that is useful for professionals. This cover, also known as errors and omissions insurance, shields doctors, architects, engineers, lawyers, and such professionals from the costs incurred by clients due to the professional’s negligence or recklessness.

Professionals earn a living through their expert skills for which they are awarded licenses. A cancelled license prevents them from practicing their skills. A lawsuit may lead to such cancellations. Insurance, which can help with out-of-court settlement, is a hedge against such damaging lawsuits. Without such insurance, a small business run by professionals may well have to close.

Not all forms of small business insurance are required for the many different types of SMBs out there. Independent contractors and businesses that provide consultancy services benefit from professional liability insurance.

For example, accountants and auditors are vulnerable to action by clients based on errors and miscalculations in accounting, data entry, misplaced documents, etc.

Professional liability insurance costs less than the cost of lawyer’s fees and other related expenses and is a highly recommended insurance for professionals.

PLI is invariably claims based and is applicable for as long as it is active. Although not very common, occurrence policies are also available. These offer cover even when the policy is not active.