Professional liability insurance, also called errors and omissions insurance, protects small businesses against the costs of client lawsuits over unsatisfactory work.
An accusation of negligence or a simple mistake at your daycare center, social work organization, or other social services business could lead to a financially draining legal battle. When a client sues your organization, professional liability insurance can pay for court costs, judgments, and other legal expenses.
This policy offers liability coverage related to:
Professional liability insurance is also called errors and omissions insurance (E&O) or malpractice insurance, depending on the industry.
Human and social services professionals can often add professional liability insurance to their general liability insurance or business owner's policy (BOP). This bundle often costs less than purchasing each policy separately.
General liability insurance provides financial protection against common accidents, like a client slipping at a senior center and breaking an arm. A BOP bundles general liability insurance with commercial property insurance to protect your equipment, furniture, and building if you own it.
Professional liability insurance can help pay your legal costs if a client sues over an alleged error, oversight, or negligence.
If you provide guidance or counseling, your business is highly susceptible to liability risks. For instance, if a social worker offers advice to a client who goes on to harm someone, your organization could be blamed.
When facing a lawsuit, professional liability insurance can pay for court costs, attorney’s fees, judgments, and settlements.
When a client is dissatisfied with your work, there’s always the possibility of a lawsuit. For example, a foster care center could be taken to court for failing to provide adequate care for a child with special needs.
When your human or social services organization is accused of unfulfilled services, professional liability insurance can cover the cost of a lawsuit, including a settlement or court-ordered judgment.
A simple error can wreak havoc on a small organization. If your group home skips a routine background check and a client is harmed, your business could face a massive lawsuit.
Professional liability insurance for social services businesses can help pay for legal fees, including the cost of hiring an attorney.
While professional liability insurance provides financial protection for work errors and oversights, it does not offer complete protection. Employee injuries and damage to your business property are a possibility at any workplace, among other risks. Other policies to consider include:
Business owner's policy: A BOP bundles general liability insurance with commercial property insurance, often at a lower rate than if the policies were purchased separately.
Directors and officers insurance: D&O for social services businesses protects board members and officers from legal expenses if they are sued for mismanagement of funds or other poor decisions.
Workers’ compensation insurance: Required in nearly every state for social services organizations with employees, workers’ comp covers medical costs for work-related injuries.