What is Professional Liability Insurance for Small Business?
What would happen if you made a mistake that unintentionally harmed a client? Professional Liability (PL) insurance (also known as Errors & Omissions or E&O insurance) helps protect your small business from failure to uphold contractual promises in mostly service-based professions.
What does this actually mean for a small business like yours?
You may be more familiar with the terms “errors and omissions insurance” or “medical malpractice insurance,” both of which are used interchangeably with PL insurance.
Professional Liability insurance pays for financial or economic damages to your customers or clients as a result of:
- Negligence,
- Malpractice,
- Errors,
- Misrepresentation,
- Incomplete or inaccurate work, and
- Breaches of contract.
In the event you receive a lawsuit for damages, PL insurance would pay for your legal defense and any damages awarded to the other party.