If you are a business owner whose company provides professional services or advice, then you have legal risks. Professional Liability Insurance, also known as Errors and Omissions Insurance, insures a person, business, and/or entity against claims made by a third party (client, patient, customer, etc.), alleging negligence in the rendering of or failure to render those professional services.
It’s important to remember that at any time and in any given situation, a dissatisfied individual could choose to bring a complaint against you. When people sue, they usually name everyone they perceive as having had anything to do with the situation. This can include you, your business, those with whom you share office space, etc.
While an important step to preventing the financial damage that can come to your business due to a claim is purchasing professional liability insurance, risk management is more than this. Risk management involved identifying, measuring, and treating exposures to loss that result from the performance of your services. An exposure is defined as something that could cause your business financial harm. Reducing your business risks involves three steps:
- Risk Identification- This provides a framework on which to build the balance of your risk management program.
- Quantifying Risk- For most companies, simply ranking risk-producing activities by their potential cause is sufficient. It’s important to understand what specific risk exposures your business has.
- Treat Professional Liability Risk- This requires you to determine which risk management tool (or a combination of tools) can be used to either reduce the risk to an acceptable level or transfer the risk to a third party.
At Newman Crane, we understand that your services as a professional benefit people on a daily basis. As Business owners, your clients depend on you for advice and expertise, but even a perceived mistake can have serious consequences on your business or practice, leading to claims against you and maybe even costing you thousands in court. To learn more about how our coverages can protect you, please contact us at (407) 859-3691.