If you run a business then you may need a professional liability insurance. Business can be at risk without professional liability insurance. Many businesses need professional liability insurance which can be accounts, architects, insurance agents, consultants, travel agents, and many other business based professions.
Generally, actual negligence in the performance of professional services is covered by professional liability insurance policy. Usually failure to meet applicable industry’s standards of care will be considered as negligence. A small business owner has to protect his business from allegations of professional malpractice. Usually, professional services can be architecture, interior design, engineering and land surveying. Some other environmental consulting, construction management and technical consulting are also included by some policies.
There are two primary forms of professional liability policies, first one is breach of contract and negligence in the performance of the services.
Generally, breach contract is less common one and it relates to claims that a professional fails to fulfill contractual obligations. Second one is negligence in the performance, it relates to professional negligence. When a professional fails to meet professional standards then it results in loss by the client then it is covered by professional liability insurance.
Claims which are covered by the professional liability insurance policies against the business and individuals within the organization such as owners, directors, and employees. This insurance policy covers both judgment amounts and legal costs which are associated to protect the business from lawsuits. There is no specific method to estimate the cost of the professional insurance, because premiums change according to the field, size of the business, income, deductible and coverage amounts.
In this, this insurance policy provides coverage for business from law suits or loss which arose from the negligence of the professionals.