Attorney fees, court fees, judgments, fines, and settlements. With costs commonly soaring into the millions, it’s no wonder most people choose to pay for an insurance policy over running the risk of a bank-breaking lawsuit. As a serious business owner, you’re at least looking at hundreds of thousands of dollars worth of reasons why you should know your options.
But why do you need both professional and business liability insurance?
There’s a hefty difference between business and professional liability insurance. It’s more straightforward than you’d think, so let’s start there.
- Business liability insurance protects you against personal injury or damage claims that take place on your business’ premises.
- Professional liability insurance protects you from any alleged negligence in your professional capacity. It’s often nicknamed “errors and omissions” insurance, which is an appropriately explanatory synonym. We’re talking about when you personally make mistakes. You fail to deliver on a deadline, or you break scope. If you’re in any way negligent in the course of your professional work, this is the coverage you’ll call on.
Still confused about the differences? Let’s look at it in terms of a physical services business, which Woods Insurance breaks down eloquently.
Say you’re that tattoo artist, with your own parlor. Professional liability insurance will protect you if a client gets an infection and sues you because they claim it’s because you negligently administered the tattoo. However, if that same client falls off the chair in your tattoo parlor and breaks a limb, then you’ll call on your business liability insurance.
So when you’re in the tech industry?
With so many new emerging roles and responsibilities in the tech industry, it can be helpful to break down where you fit in. If you work in tech, chances are almost all your liability will fall under the professional liability category. Why? Because you’re dealing with meeting deadlines, staying in scope, avoiding copyright infringement and communicating – often remotely – with clients. Rarely is a client or investor stepping into your office (living room?) and making a claim about your wobbly chairs.
Simply put, unless you can afford to chance that bank-breaking lawsuit, you need professional liability insurance. Thankfully, it can be very affordable. Give us a call to talk about what might work for you.