Professional-liability insurance is of increasing importance—and popularity—in today’s economic climate as more and more people become self-employed. Agents who have clients providing professional services to others need to know that this coverage is a necessity, especially given our society’s quick-to-sue mentality.
Miscellaneous errors and omissions, technology errors and omissions, and cyber and privacy liability are but a few lines now trending in the professional-liability marketplace.
Miscellaneous E&O, in fact, is spearheading growth in the professional-liability arena—it’s hotter now than it has ever been. Why?
With the global economy still suffering, businesses have been forced to re-evaluate their operations and cut expenditures to increase their bottom line. Unfortunately, one of a company’s largest expenses is its employees, and firms have downsized accordingly.
Many of these experienced professionals have now gone into business for themselves, and this has increased the volume of professionals in the workplace who need miscellaneous E&O coverage. This line of coverage is critical for professionals charging for their services because:
- It provides coverage for mistakes and negligence that occur during the course of services which result in a financial loss for the client.
- It covers the costs of defending a lawsuit and the resulting civil damages awarded when the insured is sued for an error or an omission.
- It provides coverage where commercial general liability and other liability policies do not.
- Nobody is perfect—the smallest oversight during business operations can cost a customer hundreds of thousands of dollars.
- Today’s soft market makes finding ample coverage facile and affordable.
Some of the most popular miscellaneous E&O classes: business/management consultants, financial consultants, home inspectors, property preservationists, real estate agents/brokers and mortgage brokers.
Technology E&O is another type of professional-liability insurance whose appeal is growing. From the latest mobile app to the flashiest e-commerce website design, technology can make or break a company in today’s competitive economy.
And when small businesses wish to implement such advanced systems, they frequently call upon various technology firms for assistance. And it is crucial that these outside tech companies carry technology E&O for the following reasons:
- Broad tech policies will cover any negligence relating to the insured’s business activities (including transmission of viruses).
- Breaches of contractual warranties due to software or hardware not conforming to required specifications will also be covered.
- The insured will be protected from intellectual-property infringement and personal-injury claims.
- Tech policies will often defend even against groundless claims.
- Policy wording and endorsements can often be customized to fit specific risks and mitigate unique exposures.
- With multiple, aggressive markets presently writing this line of insurance, premiums are cost effective.
Popular insurance classes within tech E&O: IT consultants, custom-software developers, data processors, Internet-service providers and website designers.
Cyber-liability insurance is also very popular right now. Everyday business transactions are routinely associated with the processing, storage and maintenance of databases that contain sensitive customer or patient information. When companies handle such information, the need for cyber- and privacy-liability insurance is critical because:
- Sensitive information is subject to loss by employees or theft by first or third parties.
- The costs to businesses to appropriately respond to and remedy incidents are staggering.
- These policies provide coverage for any breach of data, privacy, confidentiality or violation of consumer-protection laws.
- Policies will respond by having a dedicated team of forensic and legal experts evaluate situations and formulate action plans.
- Loss-prevention services will be implemented, and affected parties will be notified; credit monitoring and fraud-resolution services will be provided.
Popular cyber classes: banks, insurance agents, restaurants, retail stores, online businesses, hospitals, doctors and dentists offices.
If your clients are providing professional services, professional-liability coverage is a must. With premiums for professional coverages at all-time lows, the question is not whether your clients can afford it; it is whether they can afford not to have it.