What is professional liability insurance?
You have your own business, business is booming. There is plenty of work and you can set aside some money to save. But what if you are held liable for financial damages? A small mistake in this case can have major consequences. For example, a liability claim can run up considerably in costs.
To be protected from this, it is best to purchase professional liability insurance. But what exactly does this insurance protect against? And what should you pay attention to when choosing the right insurance?
Who is professional liability insurance for?
Professional liability insurance can be purchased by anyone who owns their own business. Here it does not matter what kind of company you have. However, the insurance is mainly taken out by ZZP'ers and MKB'ers.
When do I purchase professional liability insurance?
Do you own your own business? And do you deal a lot with providing advice or working with sensitive information? Then it is wise for you to take out professional liability insurance. After all, you may provide incorrect information to a client. As a result, a project is delayed. This often results in costs. To be protected against this, it is a good idea to take out professional liability insurance.
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Difference between professional liability and AVB
Note that professional liability insurance is substantively different from business liability insurance (AVB). The difference between them is that an AVB covers injury/business damages to a third party. Professional liability insurance is only for a financial loss or property damage.
What does professional liability insurance cover?
Professional liability insurance covers damages caused by professional errors. Consider, for example, giving incorrect legal advice, or making a mistake on a construction drawing as an architect.
What is not covered?
Personal injury and property damage is never compensated under professional liability insurance. This is only covered under AVB insurance. Do you knock over a pile of bricks and they break in half? Then this damage is not covered. Do you order a number of bricks and give the wrong sizes? Then this will be covered by your professional liability insurance.
Did you intentionally cause financial damage? Then logically this will never be compensated. In fact, intent is usually not covered by any type of insurance.
If you are found liable as a director/commissioner/supervisor, many insurers will not compensate you for the loss.
Was damage caused by fraud such as cheating, for example? Then, of course, this is never compensated. This also applies to damage caused by theft and forgery.
Damage caused by failure to achieve agreed goals/results is also not covered by your insurance. Consider also the exceeding of agreements made regarding costs/duration of project.
What should you look for when looking to purchase professional liability insurance?
Are you looking to purchase professional liability insurance? Then think carefully about the following points.
Do I need professional liability insurance?
Consider carefully which industry you work in. This insurance is worth considering if you primarily advise clients. If you only have an executive role, this insurance is probably not necessary. It is better to be insured than not.
Policy terms
Look carefully at the policy terms of different insurers. One insurer may cover more than another. It is wise to check this so there are no surprises later.How good is my insurer?
How quickly does your insurer pay out? Is it often a lot of hassle before they pay out? Aren't the policy conditions too strict? How does an application go? And how good is the customer service? Find out questions like these before you make a decision about where to buy your insurance.
Need professional liability insurance? Alpina is here for you!
Take out your professional liability insurance now easily and quickly at Alpina. You can request a quote without obligation or calculate your premium yourself. You always get 14 days of reflection. Do you have any questions about calculating your premium or taking out your insurance? Feel free to contact our customer service.
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