Courtesy of iii.org

Do you or your business provide professional services or advice to other businesses or individuals? Could your counsel or service lead to losses by your client for which you could be held responsible? If so, you’ll likely want to purchase professional liability insurance, also known as errors and omissions insurance (E&O).

Claims not covered by general liability insurance that are covered by professional liability insurance include negligence, misrepresentation, violation of good faith and fair dealing, and inaccurate advice.

What types of businesses need professional liability insurance?

In some states, professional liability insurance is required, especially for attorneys and doctors. Legal and medical malpractice insurance policies are special types of professional liability insurance. Other professionals that should consider professional liability insurance include:

• Accountants
• Architects
• Engineers
• Graphic designers
• Information technology (IT) consultants
• Insurance professionals
• Investment advisors
• Management consultants
• Real estate agents and brokers
• Software developers

This list is not exhaustive. Consult with your insurance professional or inquire with your profession’s trade association to determine if you might need professional liability coverage.

What’s covered… and what’s not

There are two types of professional liability polices: claims-made and occurrence. Most professional liability insurance policies are “claims-made,” meaning that the policy must be in effect both when the event took place and when a lawsuit is filed for a claim to be paid. If, however, you change careers or retire, you may want to purchase an “occurrence” policy that will cover any claim for an event that took place during the period of coverage—even if the suit is filed after the policy lapses.

Professional liability insurance will pay the cost of legal defense against claims and payment of judgments against you, up to the limit of the policy. In general, coverage does not extend to non-financial losses or losses caused by intentional or dishonest acts. Other fees, such as licensing board penalties, may also be included. Policies will generally have a deductible ranging from $1,000 to $25,000. The amount of professional liability insurance you will need and how much it will cost depends upon the size of your business and the level of risk it poses.

You may be able to include professional liability coverage in a Commercial Package Policy (CPP) as an endorsement. Note, however, the professional liability coverage is not included in an in-home business policy or Business Owners Policy (BOP).

Courtesy of iii.org

One might think that family-owned and operated businesses would be relatively immune from employee lawsuits, but that’s not the case according to a recent Gen Re article.

The reasons family-owned businesses get sued include: most family owned businesses employ at least one non-relative; the non-relative is likely to be first to be fired when the business is struggling; and family members are reluctant to discipline each other for bad workplace behavior, especially if the family patriarch is the one misbehaving.

The article gives several examples of lawsuits against family businesses and the awards paid out, concluding that a family-owned business would benefit from including employment practices liability insurance (EPLI) as a part of its insurance package.

According to GenRe:

These workplace scenarios and settlement amounts mirror those we see for all businesses. Discrimination and sexual harassment – as well as wrongful termination, violations of privacy and other employment wrongdoing – are not limited to any type, place or structure of business.

When it’s time to evaluate insurance for the family business, be sure that Employment Practices Liability insurance is not overlooked. The chances of needing EPLI protection are no less than for a slip and fall or fire loss. It’s all relative.

Courtesy of iii.org

Creating and updating an inventory of your personal possessions is one of the best ways to make the most of your homeowners or renters insurance, and makes filing a claim easier and more efficient.

A home inventory is simply a list of your personal possessions along with their estimated financial value. You can create a home inventory in a simple, low-tech manner by writing down everything in a notebook and keeping receipts in a folder. Or you can take advantage of technology and use a digital camera or smart phone or app to make your record.

No matter how you choose to do it, the important thing is to take action. An up-to-date home inventory will:

1. Help you purchase the right amount and type of insurance. Having an accurate list of all your possessions helps you to have a more productive conversation with your insurance professional when making decisions about homeowners or renters insurance coverage. After all, if you don’t know what you have, how can you insure it adequately?
2. Make filing a claim as simple as possible. Most people cannot remember what they had for breakfast much less recall the contents of their attic, kitchen cabinets or downstairs closet after a fire, storm or other catastrophe. Disasters are scary and stressful, which can make trying to list damaged property for a claims form even more challenging. Having your belongings already documented in your home inventory can be a huge relief at times like these.
3. Substantiate financial losses for tax purposes or when applying for financial assistance. Following a catastrophe, the only way to determine whether you qualify for a tax break or disaster assistance is to substantiate your financial losses. A well-organized home inventory can be an extremely useful tool in this process.

Next steps: Use these tips to get started on your home inventory.