Many people run their own businesses and as part of this business provide advice to clients. Any business that provides these types of services will need to be protected by Professional Liability Insurance. This type of insurance is designed to assist of business and provide protection in the event that they are forced to deal with a claim of negligence.
Sometimes when providing advice or similar services, things can go wrong. Perhaps you made a mistake by providing services. Maybe the advice you offered had a negative effect on your client.
In both of these cases your client may want to seek compensation from you. These are the types of situations where Professional Liability Insurance is helpful. These claims can have serious financial consequences for any business.
However by having adequate coverage through a Professional Liability Insurance policy means you can rest easy. This type of insurance would pay for any legal costs in the event that you are faced with the negligence claim. Another staggering expense could be an award that you must pay to your client. This would also be covered by the Professional Indemnity insurance policy.
Part of being a professional is to fulfill your duty to offer reasonable skill and care. If at any time your business fails to maintain this responsibility you could be slapped with a claim of negligence. Your customer may try to recoup any losses that they obtain from your advice are services. Paying for legal expenses in the situations can be quite costly.
In many situations you must have professional liability Insurance before some clients will even do business with you. For example some clients may require in a contract that the contractor holds a minimum amount of Professional Indemnity insurance coverage. If you are unable to provide documentation of having this coverage you could potentially lose clients.