Chapter 1: Malpractice Lawsuits: The Basics
Part 7: The Cost of a Professional Liability Claim
Professional liability claims can be costly, which is why it's important to prevent the claims you can. The cost of legal defense for a claim that never makes it to court comes to between $2,000 and $5,000 — a small fortune for many small-business owners. If it takes you a long time to settle or you never reach an agreement, your costs only balloon from there. In addition to lawyers' fees, you'll be responsible for…
- Settlements. The agreement you reach with the plaintiff out of court.
- Judgments. The amount a judge orders you to pay if you lose.
- Expert witness fees. The cost of bringing in experts to testify on your behalf.
- Other court costs. For example, if you lose a lawsuit, you may have to pay the plaintiff's fees.
Claims that never make it to court cost between $2,000 and $5,000 on average.
Every year, small businesses (those that make less than $1 million in revenue) pay around $33.9 billion in self-insured and uninsured commercial liability tort costs. In the next section, we discuss how small-business owners can deal with unexpected Errors and Omissions lawsuits.
Small businesses pay $33.9 billion each year out of pocket for liability torts.
Next: Chapter 2: Dealing with Errors and Omissions Lawsuits