Anyone makes mistakes, even the most accurate, most knowledgeable professional can have a bad day or can make a decision that proves to be wrong and cause harm to clients. Professional liability insurance Colorado policies provide coverage for a wide range of such issues, being not just a useless expense that burdens your business budget without bringing any value – the insurance is a type of policy that is very useful and great for giving your business the protection it needs from a wide range of claims initiated by third parties against your business. Here is why a professional liability insurance is necessary.
The Purpose of a Professional Liability Insurance
In terms of scope, professional liability insurance policies usually go beyond general liability insurance policies. While general liability policies cover for the physical damage, such as injuries or property damage caused by the professional’s negligence, professional liability insurance policies cover for more abstract risks, such as the omissions or errors committed by the professional and provides coverage for the financial damages suffered by the client as the result of the service provider’s mistake or error.
Types of Businesses for Which a Professional Liability Policy Is Essential
Some states make professional liability insurance mandatory for certain types of professionals, such as for the providers of medical services (in their case, the policy is called malpractice insurance), but besides medical professionals, there are many other types of businesses that can benefit from professional liability coverage. Some of the most common examples include web developers, software developers, lawyers and notaries public, but any business engaged into providing services, such as building contractors, beauty technicians and repair professionals should have this type of coverage.
In many cases, it is the relationship between the client and the professional that requires the insurance, even if the law does not make it mandatory for the service provider. One such example is when the professional enters a contractual relationship with the client and the contract includes provisions that require the existence of the insurance.
How to Purchase Professional Liability Insurance
You can purchase your professional liability insurance Colorado policy either directly from the insurance company, through their agent or by turning to an independent insurance broker who works with multiple insurers and can probably provide you a wider range of options. If you need any special coverage for your special and specific type of activity, you should discuss the issue with your agent or your broker – the coverage offered by professional liability insurance policies can be extended beyond the scope of standard policies, to include coverage for issues related to intellectual property or data security.
When it comes to the price of your insurance, your premium will be calculated based on many factors, such as the type of your business and the risks involved by your activity, the policy coverage limits, the number of the employees you have in your business, your longevity in your industry segment, your locations as well as your claims history. The price will be also influenced by the payment plan you choose – most insurers offer discounts to clients willing to make more substantial payments upfront.