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 Pennsylvania.
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 Pennsylvania businesses:
Pennsylvania law doesn't require small business owners to have a professional liability insurance policy. However, certain professions require coverage, and some cities, like Pittsburgh, might have individual business liability insurance requirements. You might also need this coverage to sign a contract, get a license in your field, or hold a position.
This coverage is essential in a setting where a mistake could cause a bodily injury or worsen a medical condition.
For medical professionals working in the chiropractic field, medical malpractice insurance is required with minimum limits of $100,000 per occurrence and $300,000 aggregate.
Additionally, physical therapists are mandated to carry a minimum of $1,000,000 per occurrence for their professional liability insurance.
Pennsylvania doesn't require real estate agents to have E&O insurance. But your real estate franchise, bank partners, and even clients may ask you to have this coverage and show proof of insurance in business contracts.
In this type of profession, E&O covers situations such as not disclosing a problem with a property, listing incorrect information in an MLS sheet, and bodily injuries or property damage that happen during a showing.
For lawyers, professional liability is also known as legal malpractice insurance. This coverage is not mandated for licensed attorneys in Pennsylvania. However, lawyers must notify clients in writing if they don't carry professional liability insurance of at least $100,000 per occurrence and $300,000 aggregate.
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 a frivolous lawsuit can be expensive between accounting for attorney’s fees, court costs, or a settlement.
Industries often at risk for professional liability claims include:
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 has to make expensive changes or repairs after a job is finished.
Home inspectors in Pennsylvania are required to carry errors and omissions (E&O) insurance with a limit of $100,000 per occurrence and $500,000 aggregate.
Insurance professionals, including agents and insurance brokers, deal with large amounts of financial data and have to 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.
Notary E&O insurance, also called professional liability insurance, can cover court costs and other legal expenses if a notary public is sued for an unintentional error or oversight. Some lawsuit examples include unintentionally violating the law while notarizing, being named in a lawsuit even if you did nothing wrong, or an imposter forging your signature on a document without your knowledge.
Additionally, professional liability insurance can help accountants and other finance professionals recover quickly from lawsuits and other unexpected costs from an accounting error, data breach, or office injury.
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!
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 of 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. Pennsylvania business owners also need to determine the amount of coverage required to obtain a contract or work in a certain field.
A professional liability policy covers a wide range of lawsuits, but it will not cover intentional harm you cause to others. Most insurance companies exclude:
General liability insurance doesn't include professional liability coverage. Commercial general liability covers common business risks and liability claims such as customer bodily injuries, customer property damage, and advertising injuries.
If a customer falls and suffers a personal injury at your workplace, it would be covered by your general liability policy, which would include your 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 purchased by small business owners. However, businesses in Pennsylvania, from Allentown and Pittsburgh to Philadelphia, Harrisburg and Erie, may also need:
Workers’ compensation insurance is required for all employers in Pennsylvania, even if the company only has one employee, including part-time workers. Workers' comp covers medical expenses and lost wages for Pennsylvania workers who are injured on the job.
Commercial property insurance covers your physical business property and equipment. It’s often required to sign leases.
A business owner’s policy (BOP) combines general liability coverage and commercial property insurance. It's usually less expensive than buying each policy separately.
Commercial auto insurance is required in Pennsylvania. All commercial vehicles in Pennsylvania must be covered by the mandated minimum amount of insurance. Auto policies protect against financial loss in the event of an auto accident.
Employment practices liability insurance (EPLI) will protect against lawsuit expenses related to claims of harassment, discrimination, and wrongful termination that professional liability typically won’t cover.
Complete Insureon’s easy online application today to get business insurance quotes from top-rated U.S. insurance carriers. Our Pennsylvania licensed insurance agents can help answer any questions and provide advice on your business insurance needs. Once you find the right small business insurance, you can begin coverage and receive your certificate of insurance in less than 24 hours.