How Much Does Professional Liability Insurance Cost?
Apr 25, 2021
What is the average cost of professional liability insurance?
Getting insurance can be a tricky business for your business. You may feel overwhelmed by questions like “What kind of insurance should I get", “what amount of insurance do I need”, and “what assets do I need to protect?” These are just a couple of questions that run through every business owner’s mind while looking for insurance for their business. One thing you may want to consider is Professional Liability Insurance. We're going to take this opportunity to provide you with a crash course on Professional Liability Insurance and to look at just how much Professional Liability will cost for your business.
What is Professional Liability Insurance?
Professional Liability Insurance is a type of insurance that provides coverage from any kind of error or mismanagement that takes place while on the job. For example, you provide consulting services but you accidentally delay an analysis report that was supposed to be shared with a client; therefore, causing the client financial or reputational loss. The client can sue you for missing a deadline. Similarly, if the client thinks that the report is not at the level of quality it should be, or if there is a breach of contract, the client can file a lawsuit against you. Your Professional Liability Insurance can help cover all legal and defense costs, including (but not limited to) costs for settlement.
Does Your Business Need Professional Liability Insurance?
If you offer specialized services or services that hold you to a higher standard of accountability, like consulting services, accounting or tech services, you need Professional Liability Insurance. Some other examples of professions that might need Professional Liability Insurance are physicians, lawyers, engineers, contractors, or any kind of business that provides professional advice or services in exchange for financial compensation. All of the aforementioned businesses should seriously consider Professional Liability Insurance as part of their insurance solution.
How much does Professional Liability Insurance Cost?
The cost of your Professional Liability Insurance depends on many factors. The factors that are taken into consideration while determining your premium are:
- The type of business you operate (industry and services offered),
- The years of experience you have running the business,
- The number of employees in the business,
- Your past and projected revenue,
- The amount of Professional Liability Insurance coverage you want,
- And whether or not you have made any previous claims.
Typically, over 50% of small businesses pay about $500-$1000 annually for their Professional Liability Insurance in the form of premiums. The cost is generally on the higher end of this range for businesses within the building, design industry and the lower end for services such as accounting and finance.
Learn more about Professional Liability Insurance/Errors & Omission Insurance, "What is E&O Insurance for?"
We understand that every unique business has different needs, so we always emphasize the very real need for customized insurance solutions. If you are still feeling uncertain as to whether or not your business would benefit from Professional Liability Insurance, it may be a great idea to consult an insurance professional. At Foxquilt, our team of insurance experts would be happy to work with you to help you find a smarter insurance solution for your business. Get started on your online quote today.
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