Say you’re shopping for a new oven for your kitchen at home. There are dozens of models, all touting state-of-the-art features and product guarantees. And they have exorbitant price tags to match.
But you’re not going to buy the first shiny range you see at the big-box store. You’ll do your research, compare prices, read reviews, and look for the best deal without sacrificing quality. A warranty with that new appliance will sweeten the deal. If your brand-new oven malfunctions or has a design flaw, it’s guaranteed to be fixed or replaced.
Your clients are doing the same thing when they consider enlisting your small business’s services. They want to get the most mileage for their money without sacrificing the quality of work, and they may want you to have Professional Liability Insurance, which they see as a sort of warranty for their purchase. If something goes wrong, your insurance gives them a way to recover their losses.
Let’s look at reasons why it’s worth investing in Professional Liability Insurance – not only to cover your risk exposure, but also to attract and retain clients.
Building Credibility with Professional Liability Insurance
A warranty is a written statement that guarantees the condition of a product and states the manufacturer is responsible for replacing or fixing the product within a specific time frame. Everyone wants that sort of protection, and the expectation for a small business is no different. How do your clients know you’re going to deliver on your promise for high-quality work? You can boast a magnificent skillset, but it doesn’t mean much if you can’t back it up.
A Professional Liability Insurance (aka Errors & Omissions Insurance) policy is like a guarantee or warranty for your customers. If you have this coverage, clients know you have the financial means to back up your work or services in the event of…
Say you’re an accountant. You prepare a small law firm’s taxes, but an error in your calculations prompts an audit by the IRS. The law firm stands to lose revenue because of your mistake, but your Professional Liability Insurance can help them recoup their loss if they file a lawsuit against you. It’s a safety net not only for your business, but also for your clients.
Learn more in "Is Your Small Business Required to Carry Professional Liability Insurance?"
3 Tips for Earning Client Trust
An E&O policy helps you build credibility with your client-base and sets your small business apart for the competition. It tells your customers you take your business seriously and you want to deliver nothing short of your best work.
But how else can you persuade new customers to stick with your business?
- Use client contracts. Draw up a contract that clearly outlines what you will and won't do. A written agreement should succinctly define expectations, work deadlines, and compensation. It can help settle disputes that arise down the road.
- Communicate efficiently. Address your client’s concerns or questions in a timely fashion. Clients appreciate updates on your progress and any hurdles that may change the completion date. Document all your communication to serve as a reference.
- Be honest and fair. If you want your client’s trust, you’ll need to trust them, too. When handling customer problems, put yourself in their shoes and think about what you would want to happen. Work out a fair solution from this point of view.
For additional tips on how to actively improve customer relationships, read our article “4 Ways to Prevent Professional Liability Claims.”