Professional Liability Risks
As a professional with extensive knowledge in your area of expertise, you always try to dot all the Is and cross all the Ts in the services you provide to your clients. But no one is perfect. If a disgruntled client believes your errors have cost them money (even if it’s not true), you might be sued, and the cost to defend yourself could be disturbingly high.
To protect yourself, consider buying professional liability insurance (usually called Errors and Omissions, or E&O insurance). E&O insurance coverage is specific to your profession and industry, so work with an insurance professional who understands the unique professional liability risks you face as a consultant. You may have to produce a lot of documentation, which can lengthen the application process.
- Depending on the services you provide, your client may require you to have E&O insurance as a protection for them, in case errors in your services cause a third party to sue them.
- Research insurance solutions designed specifically for consulting firms to protect your business from financial loss.
- A miscellaneous professional liability policy can also provide worldwide coverage for:
- Personal injury, such as libel and slander, arising from professional services.
- Punitive damages, where allowed by law.
- Expenses incurred for disciplinary proceedings if you are brought before a regulatory body or association.
Consult with your insurance agent about the liability options available to you.