I’m not a doctor. Do I really need professional liability insurance?
“I’m not a doctor or a lawyer, so I don’t need professional liability.”
Okay, but are you a translator? Allied health worker? PR consultant? Software developer? Mortgage broker? A “pro•fes•sion•al: relating to a job that requires special education, training, or skill. And if part of your job or business is to offer a specialized service or advice, you should consider securing professional liability [ errors and omissions liability ] jointly with your Commercial General Liability coverage.
If you (like most) occasionally mess up at work, you’re not likely to physically harm someone (most days), or damage someone’s property (though I suppose the possibly of a dropped laptop exists), but rather you’re more likely to cause a financial loss to your client. By failing to do what you were meant to do, you may be held responsible and this usually manifests in a financial loss to your client. If you’re counting on your General Liability policy to respond in this instance, then you’d better start saving now, as the General Liability is intended to respond to suits brought forth because of physical injury or property damage to third party assets. If you are a contractor, plumber or chef and you are sued, this is the type of coverage you would require.
“I will never have a claim”. Okay. That’s why you get hired – you’re good at what you do. But the other significant benefit of E&O insurance is, even if you’re not found to be liable, E&O insurance also picks up defense costs. If you think insurance is costly, note that the average hourly rate for lawyers in Canada is $360 per hour & the average cost of a 2-day civil trial is $26,444 (Source: Canadian Lawyer Magazine Survey 2010).
There are other ways to protect you, contracts, hold harmless agreements, warranties, etc., but in our evolving business environment, with exceeding customer expectations, an E&O policy is a cost effective way to minimize your exposure.
Errors & Omissions: Breakdown of Industry Sectors
- Insurance – 7%
- IT – 46%
- Financial – 3%
- Environmental – 2%
- Communications & Media – 1%
- Administrative – 12%
- Technologies – 7%
- Misc – 1%