Most businesses carry some type of general liability insurance. While these policies provide a good starting point for coverage, they often have gaping holes that can be costly to discover. Before any incident occurs, it’s best to contact an insurance professional and shore up any gaps in coverage the company may have.
While general liability is vitally important for any company, it will not protect a business owner against faulty merchandise production. Product recalls, injuries caused by defective merchandise, or property damage incurred by customers can all prove costly for entrepreneurs. Damages can easily run into the millions of dollars for each single incident. Product liability will cover those damages and legal fees sustained in the event lawsuits are filed.
As companies expand operations to international destinations with increasing regularity, it is important for business owners to understand their insurance policy stops at the border. International liability policies provide coverage against claims filed on foreign soil and protect the business owner from costly international legal fees.
As the name implies, professional liability insurance covers certified professionals against torts claiming misconduct or negligence. Also known as malpractice insurance, these policies are primarily held by doctors, lawyers, accountants, financial planners, consultants, engineers, and building professionals. In many states, the policies are required in order to maintain certification. While they cover most civil torts, they will not protect the professional from illegal activities such as embezzlement, theft, or fraud.
Errors and Omissions
Much like professional liability insurance, E&O protects against errors made while working in a professional capacity. This policy is often confused with professional liability, and while the two may overlap in many areas, they are actually different policies. E&O’s protect those working in a professional capacity, not only the professional himself. For example, while an accountant may be covered under a professional liability policy, such a policy may not cover his staff in the event of errors.
The differences between E&O and professional liability are subtle and easily confused. Even the judicial system has had difficulty in distinguishing the two over the years. That being said, below are two examples which may help differentiate the two more effectively.
Example 1: A Certified Financial Planner oversees the assets of a client. During the course of his tenure, the client loses large sums of money. As a result the client sues the CFP. Because he is a certified professional, the lawsuit and any damages realized would be covered under his malpractice insurance.
Example 2: A CPA prepares the tax returns for a client and then instructs her secretary to messenger those returns across town. The secretary sends them to the wrong address causing the client to miss important filing deadlines. Penalties and fines are incurred by the client. The malpractice insurance may not cover this type of error because the professional herself was not responsible but rather her secretary who acted in a professional capacity caused the error and loss.
When deciding which types of additional liability insurance to purchase, make sure to consider the worst case scenario for the business involved. Verify that all staff members, including those who work in a professional capacity are covered. Lastly, don’t be afraid to overlap certain policies to make sure that the business and staff are adequately protected. Otherwise, any gaps could cost millions of dollars in legal fees and losses.
Give Pro Player Insurance Group a call today at 855-367-PPIG (7744) for more information on which Fort Lauderdale business insurance plan is right for you.