Your professional insurance needs go way beyond property damage.
Protect your clients, your reputation, and your livelihood with these five professional insurance policies.
Most business owners understand the risk fire poses for a restaurant, or the consequences of a hurricane flooding a retail store. But many people don’t stop to think about the intangible risks that threaten professional services businesses like accounting firms, law firms, or marketing agencies.
Risks that property insurance and general liability coverage can’t protect you from.
Insurance works best when it’s custom fit to you. If you’re running a professional services business, you need professional insurance policies that fit.
Businesses that provide a professional service often seem “low-risk,” but just because you’re not working with open flames or heavy machinery doesn’t mean that you’re immune to disaster.
Here are five professional insurance policies that no professional services business should be without.
1. Errors & Omissions Insurance
A general liability policy protects against third-party injury and property damage, but what if your business provides a service rather than a product? This is where errors & omissions insurance comes in.
Also known as professional liability insurance or malpractice insurance, errors & omissions (E&O) insurance covers your legal fees if you are sued for negligence or otherwise harmful advice or behavior.
You’ve probably heard the term “malpractice” in a medical setting, but E&O insurance is just as helpful for other types of businesses, too. For instance, if your professional accounting advice led to one of your clients getting audited by the IRS and they sued you for damages, professional liability insurance would be the appropriate policy to look to for coverage.
2. Data Breach/Cyber Liability
One hundred years ago, files could be kept safe under lock and key. But with the rise of digital data (and the increase in cyber crime), business owners have to do a lot more to keep their clients’ information out of the hands of thieves.
Businesses of any type and size can be targeted by cyber criminals; in fact, small- to mid-sized businesses are the most targeted, as most hackers assume that they don’t have any protection in place.
Data breach and cyber liability coverage help protect your clients and your reputation against the extensive (and expensive) fallout of a data breach. There are different types of policies available, from those that help you clean up after a cyber attack to ones that assist affected clients.
If your business involves any kind of sensitive client information (including credit card numbers), adequate cyber risk protection should not be ignored.
It’s an exciting moment when you can hire your first employee…but it also opens you up to a lot more risk.
Employment Practices Liability Insurance (EPLI) helps protect against lawsuits charging your company with:
- Discrimination based on race, color, religion, sex, pregnancy, national origin, age, handicap, or marital status;
- Wrongful termination or discipline;
- Failure to promote;
- Breach of contract; and
- Other employment-related complaints.
Please note that we didn’t say EPLI protects your business against discrimination (unlawful acts are never insurable). It protects against the lawsuit claiming that you are (whether or not that lawsuit is based in fact).
Legal fees, settlements, and judgments can total hundreds of thousands of dollars before the case is settled. Do you have enough set aside to pay for that?
4. Valuable Papers and Records Insurance
Leases, contracts, legal records…what would you do if you lost it all?
In the event of a disaster, it’s relatively simple to order new desks, office chairs, or even computers. But how do you restore or replicate original, signed documents?
A valuable papers and records insurance policy can help.
This policy can cover the costs of generating new documents so you can get back to business as soon as possible.
5. Business Interruption Coverage
When disaster strikes, the consequences typically come in waves.
First, you have the cost of stopping the damage from getting worse. Then, you have to pay to get things back to the way they were. But how do you collect the loss of income that occurred while you were cleaning up the mess?
Business interruption coverage does just that.
So if your restaurant catches fire or your law firm is destroyed by a hurricane, you’ll be reimbursed for the money you lost during the remediation.
It’s important to note that not every possible disaster is covered. Things like nuclear explosion and the outbreak of war are typical exclusions. It’s no laughing matter. There is great national debate, dozens of lawsuits, and even legislation being pondered as we navigate our way through the COVID-19 pandemic. It’s critical that you understand this coverage and your specific policy by reading them and talking about them with your independent insurance agent.
Much like businesses, risk comes in different shapes, sizes, and forms. And if you’re only focused on the risk posed by disasters like fire, flood, and theft, you’re only looking at half the picture.
Professional services are a different type of business and they need certain professional insurance policies. If you operate a CPA firm, law firm, doctor’s office, or any other kind of professional services business, you need to add E&O, data breach, EPLI, valuable records, and business interruption coverage to your insurance portfolio.
Carrying the right kind of professional insurance is important, but so is finding the right local independent insurance agent. For the past 35 years, Harry Levine Insurance has provided impeccable coverage and customer service to home- and business owners throughout Central Florida. Give us a call for a free quote to see how we can help protect your business.