If you run a nonprofit organization, you may be asking, what is professional liability insurance? If you have an insurance policy, you can protect yourself from the high costs that are associated with claims of professional error. Fortunately, there are several ways you can protect your nonprofit organization’s vision and mission while minimizing the cost of this coverage. Read on to learn more about the benefits of professional liability insurance for nonprofits. Also, discover how to get the best value for your money by minimizing its costs.
Professional liability insurance protects you from the high cost of alleged professional mistakes
Unlike general liability insurance, professional liability insurance covers the costs of alleged mistakes or oversights by a business or individual. This type of policy is often referred to as errors and omissions insurance (E&O) insurance. While it is not legally required, many businesses find this protection vital. It’s crucial for businesses that provide expert or advisory services to clients, because the cost of a disgruntled customer can ruin a business. E&O insurance is an important part of a business owner’s budget and protects businesses from huge financial losses from claims of professional mistakes.
In this scenario, the real estate agent has helped her client find her dream home. However, the homeowner who purchased the home blames her agent for pointing her in the wrong direction. The new homeowners sue the real estate agent for the cost of repairs to the home, but she waived her right to a home inspection. Professional liability insurance can cover the cost of defense in these types of lawsuits.
It protects your nonprofit organization’s mission and vision
There are several reasons why professional liability insurance is vital for nonprofits. Many employees file lawsuits against nonprofits for salary and benefits, and disgruntled employees often make D&O claims against them. A policy can protect you from D&O claims by covering mishandling of confidential or private information, or by defending yourself in court if someone sues you. A good policy will also cover your volunteers and independent contractors, as well as medical professionals.
There are many types of liability insurance, but a primary concern for nonprofits is employment practice liability. Most commonly, these cases involve the hiring or firing of employees. Nonprofits should consider adding employment practices liability coverage to their policies. This type of coverage covers EEOC claims, sexual harassment, and wrongful termination lawsuits. These are just some of the risks associated with employment practice liability insurance.
It shields you from the high cost of alleged professional mistakes
If you are a lawyer or accountant, professional liability insurance will protect you from the high cost of alleged mistakes made by your clients. As a professional, you are expected to perform at a high level of expertise, and if you fail to meet expectations, you may be held liable. In some cases, professional liability insurance can save you thousands of dollars. It also protects your business from accusations and lawsuits.
The cost of professional liability insurance will vary depending on your industry, the number of employees working for you, and the limits of the coverage. However, higher coverage limits usually result in higher premiums, and a lower deductible will lower your premiums. In order to protect your assets, you should check your insurance policy before signing up. It should also include a claims filing process that is as simple as possible.
It helps you reduce the cost of professional liability insurance
Professional liability insurance is necessary for any business that provides a service to clients. The cost of a lawsuit involving a professional liability claim can be thousands of dollars, so a policy is important for any size company or industry. Here are some tips to reduce the cost of professional liability insurance for your business. When choosing the appropriate policy, consider deductibles and the level of coverage. A higher deductible can reduce the costs of professional liability insurance significantly.
The cost of professional liability insurance varies based on the type of business and how much money can be at stake in a mistake. You can choose a coverage limit of $250,000 or even millions of dollars. However, make sure you understand that higher limits of coverage will mean higher premiums. If you want to avoid a high-risk exposure, choose a policy with a lower deductible. Choosing the right policy for your business is essential to ensuring its financial stability.