Posted by : Dan Levenson Tuesday, September 23, 2014
When it comes to insurance, businesses have a lot more to worry about than just health insurance. Professional liability insurance, for instance, aims to protect people (and businesses) from costly lawsuits relating to the performance of their professional responsibilities. Common examples of these are malpractice insurance for doctors and lawyers.
Malpractice or negligence is just one aspect of the liabilities insurance. Customers or clients could file a lawsuit against companies for a variety of reasons, such as failure to deliver a promised product or service, production and distribution of inferior or damaged merchandise, errors in judgment calls, and many others.
Every Lawsuit Counts
Many professionals believe that since malpractice lawsuits essentially have low probabilities of succeeding, they can do away with professional liability insurance. However, the fact is, the moment your business is summoned to appear in court, the costs are already flowing out of your pocket, something that could take a huge toll on your revenues.
Know that most liability insurance offered by firms involve claims-based coverage. This means that only lawsuits made and reported during the period of your policy will be reviewed. If there are previous claims that you want covered, look for a retroactivity coverage. If you’re retired but you’re still concerned about lawsuits made relating to your previous services, look for extended coverage.