Thursday, March 29, 2012

What is Professional Liability Insurance?

                            (Photo credit: Wikipedia)
If your an independent contractor you have probably already purchased many different kinds of insurance like health insurance, business insurance, and other insurance products. But have you given thought to the need for professional liability insurance which will protect you if a customer sues you for how you did or didn't fulfill your professional obligations. This kind of insurance is also called how you did or didn’t fulfill your professional obligations. This kind of insurance is often forgotten because many professionals think that their general liability coverage policy is enough to protect them from client lawsuits.

As with liability insurance, proliability insurance is there to protect your financial resources in the event of a customer lawsuit. Many companies that hire you sometimes require this kind of insurance as a general policy. A lot of 1099 sub-contractors are finding that the requirements to carry professional liability insurance are increasing because of the demands of clients. 

The services rendered today by independent contractors are increasing in complexity. Projects that you could be working on may interface with multi-million dollar infrastructures that could be damaged by your interaction, through no fault of your own. Having the right protection is a necessity in today's business world.  If your in the IT or tech industry you are especially vulnerable because of the complexity of the businesses your customers have. 

There can be instances where a client is just dissatisfied or claiming that you have not fulfilled your contract, even though you have. An angry client can easily bring a lawsuit on you and fighting the undeserved suit will waste your time and money. Having someone on your side is where professional liability insurance comes through.

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3 comments:

  1. Second word in the article should be "you're".

    In this sue-happy society, it sounds like a must have for contractors.

    ReplyDelete
  2. A general liability agreement is a bit of a bear trap really. Many believe that they are protected by the law once they have this and that they have met all of their requirements, however, as we know this is not always the case. To know what insurance you need, you really ought to seek professional advice. Constructaquote liability insurance will tailor their recommendations to your situation and will answer all of your questions before you make a decision on the right policy.

    ReplyDelete

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