Big clients have big budgets. Landing a big client often means more money for similar work that you do for smaller clients for less pay. If your work increases the client’s sales, they make big profits. However, if because of your work they lose sales, their losses are also big. Big clients with big budgets also have ample means to take you to court to get compensation for their losses. These types of clients are a double-edged sword where life can be good but may also go horribly wrong. This is why professional liability business insurance is vital for protecting your business and your livelihood.
If you are a consultant who offers advice or if you provide a service, we believe there is always the possibility that an error or omission on your part or of one of your employees may cause a client to sue you for malpractice.
Mistakes Will Happen
Even the most careful of individuals cannot exert complete control over their environment, their employees, and their outsourced help. A glitch in your software can shut down your client’s manufacturing operations, an analysis mistake by your employee may force your client to recall their product, or your web server could go offline and shut down your client’s website at a critical time. Technology and managing people is complex and we know that anything complicated is subject to problems and mistakes. Murphy’s law was not coined in a vacuum.
Assessing Your Need For Professional Liability Business Insurance
Client lawsuits do not normally happen every day. If you have been fortunate so far and have not been sued by a client, it does not guaranty against lawsuits in the future. When assessing your need for professional liability insurance, look at the averages for your field and factor in the consequences to your business of even a single lawsuit. Even a low risk of litigation is a concern if a single lawsuit can wipe out your practice. If you are landing big clients, then the consequences can be devastating.
Professional liability business insurance covers legal expenses regardless of the lawsuit’s outcome. It covers any settlements you must pay, up to the policy limit. Libel and copyright infringement are covered. Lawsuits arising from past work are also covered up to a specified retroactive date. You are covered whether the error or omission was made by you, your employees, or subcontracted help.
It is our opinion that if a single lawsuit can hurt your business financially, you need professional liability business insurance. In addition to protection, it also gives your consultant or service business more credibility, which is important when landing big clients. If you have questions about this, please don’t hesitate to contact us.
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Rob Macoviak is the President of Oyer, Macoviak and Associates. Oyer, Macoviak and Associates is the oldest independent insurance agency in Boynton Beach and has been in business since 1953.