Professional liability insurance coverage, also called errors and omissions insurance (E&O), protects small business owners against the cost of client lawsuits over unsatisfactory work. Although not required by state law, it's strongly recommended for professional service providers in Florida.
Professional liability insurance covers the cost of lawsuits related to the quality of your work, including legal fees and settlements.
It covers the following types of customer claims for many Florida businesses:
By Florida law, doctors must carry a malpractice insurance policy with a $100,000 per-occurrence limit and a $300,000 aggregate limit to practice medicine.
In Florida, most small business owners aren't required to carry a professional liability insurance policy. However, you might need this coverage to sign a contract or to get a license in your field.
Professional liability is referred to as medical malpractice insurance when it applies to doctors and other healthcare professionals, such as therapists. By Florida law, doctors must carry a malpractice insurance policy with a $100,000 per-occurrence limit and a $300,000 aggregate limit to practice medicine. Higher limits are required for doctors who have hospital staff privileges or perform surgery in an ambulatory surgery center.
However, there are alternative means of covering these costs (i.e., a trust account and letter of credit). Additionally, there’s an exemption to carrying medical malpractice insurance, but the healthcare professional must publicly display their exemption and provide a written notice to all clients.
Though E&O insurance is not required for Florida real estate agents, some states require agents and brokers to carry it.
For lawyers, professional liability is also known as legal malpractice insurance. Florida doesn’t require attorneys to carry legal malpractice insurance, but lawyers must report whether they do carry the insurance each year when they register.
Any business that provides a professional service or expert advice should carry professional liability coverage, as a client could sue if your service or advice causes accidental harm. Even an unwarranted lawsuit can be expensive between attorney’s fees, court costs, or a settlement.
Industries often at risk for professional liability claims include:
IT consultants and other tech professionals are susceptible to lawsuits related to system downtime, data breaches, missed deadlines, and errors. They can bundle E&O insurance and cyber liability insurance into one policy—tech E&O—to protect against all of these risks.
Those who work in building design, such as architects and engineers, are at risk of a lawsuit if a client accuses them of making a costly mistake. For example, a bridge could develop cracks over time, or a project could be delayed for months due to unforeseen circumstances.
Those who work in construction and contracting, such as carpenters and electricians, could face a client lawsuit over construction delays. They could also face accusations of negligence if the customer is dissatisfied with their work or must make expensive changes or repairs after a job is finished.
Insurance professionals, including agents and insurance brokers, often deal with large amounts of financial data and must use their best judgment in advising their clients. If a client doesn’t have enough coverage, or the right type of coverage, they might blame their agent or the insurance agency for failing to make sure they were protected.
Even if you’ve done nothing wrong, a disgruntled customer might file a lawsuit if your advice leads to a financial loss.
Get professional liability insurance to protect yourself from claims that you didn't deliver on a deadline, or made a costly mistake.
Some clients require you to have this policy. It can protect you from expensive lawsuits for only about 60 dollars per month.
Don't put your business at risk. Apply for your policy today!
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The average cost of professional liability insurance, both nationwide and in Florida specifically, is $61 per month.
The cost of professional liability coverage depends on several factors, such as:
Professional liability insurance covers your legal defense costs if you’re sued over a mistake in your professional work.
Even if you’ve done nothing wrong, a legal battle can be expensive. In addition to your attorney’s hourly rate, you’ll likely be charged for administrative costs such as copying, filing, and travel expenses. You may also have to pay for expert witnesses to testify on your behalf, a court-ordered legal judgment, or a settlement to avoid trial.
Professional liability insurance covers all the above, up to the coverage limits of your policy. The policy limits you choose should take into account how expensive it can be to fight a professional liability lawsuit. You also need to determine the amount of coverage required to obtain a contract or work in a certain field.
For example, healthcare professionals in Florida will likely need liability limits of $1 million per claim, and $3 million in aggregate per year.
A professional liability policy covers a wide range of lawsuits, but it won't cover intentional harm you cause to others. Most insurance companies exclude:
General liability insurance doesn’t include professional liability coverage. General liability covers common business risks and liability claims such as customer injuries, customer property damage, and advertising injuries.
If a customer falls and suffers an injury at your workplace, it would be covered by your general liability policy, including any legal defense costs. If someone sues you over unsatisfactory work, it would be covered by your professional liability coverage.
Read more about general liability vs. professional liability insurance.
General liability and professional liability are often the first two policies bought by small business owners. However, they aren’t the only types of insurance policyholders might need.
Workers’ compensation insurance is required for all Florida businesses with four or more employees. However, construction businesses must have coverage for every employee. This policy covers medical costs and lost wages for work-related injuries and illnesses.
Commercial property insurance covers your business’s physical location and equipment. It’s often required to sign leases.
A business owner’s policy (BOP) combines general liability and commercial property insurance. It’s usually less expensive than buying each policy separately.
Commercial auto insurance is required in Florida for any vehicles used solely for work purposes.
Cyber liability insurance covers the cost of dealing with a data breach or malicious software attack.
Employment practices liability insurance (EPLI) protects against legal expenses related to claims of harassment, discrimination, wrongful termination, and other violations of employees’ rights.
Complete Insureon’s easy online application today to get insurance quotes from top-rated U.S. providers. Our Florida-licensed insurance agents can help answer any questions and provide advice. Once you find the right small business insurance, you can begin coverage in less than 24 hours.