Factors to Consider When Buying Professional Liability Insurance
Professional liability insurance, also known as errors and omissions (E&O) insurance, is essential for professionals who provide services or advice. It protects against claims of negligence, mistakes, or failure to deliver promised services. Mynatt Insurance Agency, Inc. provides professional liability insurance in Tampa, Carrollwood, Temple Terrace, Lutz, Westchase, Greater Northdale, FL and surrounding areas.
When purchasing a policy, consider the following factors:
- Industry-Specific Coverage
Different industries have unique risks. Ensure the policy covers risks specific to your profession, such as medical malpractice for healthcare professionals or errors and omissions for consultants and legal advisors.
- Policy Limits
The policy limit determines the maximum payout for a claim. Consider your potential liability exposure and industry standards when selecting limits. Businesses with high-value contracts may require higher limits.
- Claims-Made vs. Occurrence Policies
Claims-Made Policies: Cover claims filed during the policy period, regardless of when the incident occurred. You may need tail coverage after policy cancellation.
Occurrence Policies: Cover incidents that happen during the policy period, even if the claim is filed later.
- Exclusions and Limitations
Review what the policy does not cover. Common exclusions include fraudulent acts, intentional misconduct, and bodily injury (which may be covered by general liability insurance).
- Legal Defense Costs
Check whether legal defense costs are included within the policy limits or covered separately. Policies that include defense costs within the limit may deplete coverage faster.
- Deductibles and Premiums
Compare deductibles (out-of-pocket costs before coverage applies) and premiums to find a balance between affordability and comprehensive coverage.
- Retroactive Date Coverage
Some policies cover claims related to past work. Ensure the policy includes a retroactive date to cover prior services.
- Reputation of the Insurance Provider
Choose an insurer with a strong financial rating, reliable claim settlement history, and positive customer feedback.
By considering these factors, professionals can secure the right coverage to protect their business from potential legal claims and financial loss.
Please reach out with any questions you might have, and we will be happy to help.
