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Professional Liability Insurance
Do you see value in professional liability insurance for your business? Anyone been helped by this? Why do I need it?
I see value in professional liability insurance, which covers claims against you for negligence, even if you didn't make a mistake, as well as any unknown claims arising from work completed in the past (if you have retroactive date) and other claims. The way I look at it is if I give advice and the client decides to take that advice, which at a later time they may decide it was the wrong thing to do, there's always a chance the client may try to come after you depending on how bad the situation is. My concern is that as a consultant you are always the easy one to blame, and if that's the case the worst may not be that you may loose the account. - I have my professional and general liability insurance with Hiscox Business Insurance, and they are more reasonable from a price perspective than others. Fortunately I have not needed it (or used it), but just like any other insurance it's a matter of "peace of mind". You don't healthcare insurance, either, if you have not health issues. But you have it for the case that you might need it. Those are just my thoughts! (P.S. Some clients may require you to have it before you start consulting.)
Really depends on the type of work you do. I've gotten by for years without carrying it and only picked it up when it was required for a contract.
I have had professional liability insurance for years, not driven by a specific need or contract, but driven by a desire to limit my overall business liability. Last quarter, I added cyber and privacy insurance as well, since that was effectively required by a new contract.
While it was required for a contract with my first client (this was the initial reason to obtain it), like any type of insurance against risk, it's likely worth the cost. It would probably take only a single incident where the insurance would have proven useful, even if you win out at the end, to justify the cost. Think legal fees, time away from other clients defending against the claim, the mental distraction - all potentially preventable with (General) liability and/or Errors & Omissions insurance.
As with other types of insurance, it's a measure of your own capacity for risk-taking that will determine if, when, and how much insurance you obtain.
My firm has carried professional liability insurance since the onset. We do a number of investigations and fact finding that may lead to criminal, civil and internal disciplinary cases. These often involve legal actions by one or both parties. Our society is too litigious to take a chance of not being included in a legal action.
I think it makes sense especially if you have assets in buildings, however, its normally wrapped into your overall insurance needs, thus to offer it as a stand alone, I don't think you could be competitive.
Similar to the other responses, I have General Liability and Error & Omissions coverage. Fortunately I have not needed to use it - as is the case with most insurance, but it was a requirement for an eight month contract engagement, so a small price to pay in that instance.
I see value in carrying this insurance, but you may not need errors and omissions if your clients review and approve your work. I carry mine through the Hartford with a cost of less than $1,000 per year. Some clients will require coverage and a last minute scramble to find coverage can be a hassle. Plus, I think it's generally a good idea to have the protection.
This has been a must for working in the Healthcare space, which I have for years. Additionally, if there was a way to pool this through Patina Nation, it could allow for the base level to be higher.