How to Get Professional Liability Insurance

At least 37% of small businesses in Massachusetts shut down because of the COVID-19 pandemic. If you were lucky enough for your business to survive, or if you are beginning to rebuild, this guide is for you.

Because of the pandemic, businesses are placing more importance on insurance. One of the policies that can benefit various industries is professional liability coverage.

Not sure how to get professional liability insurance? Keep reading to find out.

Running a business in Boston Ma comes with unique challenges, and having the right commercial insurance is essential to protecting your investment. In this guide, we’ll explore the importance of commercial insurance in Boston, Massachusetts, and help you find the best coverage for your business.

With our comprehensive guide, find the best commercial insurance in Boston to protect your business from potential risks, liabilities, and unexpected events.

Whether you’re a small business owner or running a large corporation, finding the right commercial insurance coverage is crucial for ensuring your business’s success. In this article, we’ll explore the importance of commercial insurance for businesses in Boston and provide tips on choosing the right coverage for your unique needs. If you’re looking for quality commercial insurance coverage in Boston MA, Econosurance can help.

What Is Professional Liability Insurance?

Before learning how to get professional liability insurance, it’s important to know what it is and what it covers. This type of insurance policy can protect companies against these claims:

Breach of contract
Professional negligence or failure to meet the “duty of care”
Errors or omissions
Failure to meet a promised deadline

Professional liability insurance, also known as errors and omissions (E&O) insurance, can cover the above claims, including legal and settlement costs.

Who Needs Professional Liability Insurance?

Any business can apply for professional liability insurance. It’s especially important for professionals that provide advice and services to a client in exchange for money.

Business professionals that need this insurance include, but are not limited to, the following:

Accountants
Consultants
Financial advisors
Real estate agents and brokers
Graphic designers and software developers

In some fields, professional liability insurance is required.

Applying for Professional Liability Insurance

To apply for professional liability insurance, you’ll need to gather basic information about your company and its operations. When you have the right information readily available, applying only takes a few minutes.

1. Gather Financial Documents

You can start by collecting your company’s key financial records, such as:

Current fiscal-year revenue
Projected revenue for the following year
Total payroll amounts
Revenue generated by your largest customer
Executive compensation totals

2. Provide General Business Information

In addition to financial details, you’ll also need to share general company information, including:

Types of employees and how many you employ
Business structure (corporation, partnership, LLC, etc.)
Business inception date
Contact information for each business location
Brief description of your company’s activities

If you own 3% or more of a client company, you must note that revenue. If you share 51% or more of a subsidiary business, you need to include those insurance policies.

3. Include Client Contract Information

One of the most important parts of your E&O insurance application is your client contract data. You’ll need:

The purpose of client contracts
The percentage of clients you have contracts with
Whether subcontractors have professional liability insurance
How often contracts are amended, updated, or modified

4. Provide Insurance & Claims History

You’ll also need to submit documents about your past insurance coverage and any claims you’ve filed. The application may ask for:

The deductibles and limits of your past policies
Any claims filed in the last year
Ongoing disputes that could lead to future claims

With these details and documents, you can apply for professional liability insurance easily through an online application.

The Application Process

Once you have your documents gathered, the application process is pretty straightforward. After filling out all of the questions and information that the application asks for, you’ll receive your paperwork.

Insurance quotes are sent to you to give you a better understanding of how much your insurance premiums will cost each year.

The insurance policy itself is a 50 to 100-page document that summarizes the type of coverage offered. The policy sets:

Deductibles
Coverage limits
Premiums

If you agree to the terms of the policy, you’ll receive a certificate of liability insurance. This will act as your proof of insurance. Clients may ask for this certificate before agreeing to work with your business.

What’s in Your Insurance Policy?

A professional liability insurance policy defines the obligations between the insurer and you. In basic terms, the policy states that you’ll pay premiums to receive certain coverage. However, a policy is much more than this.

Policies include declarations at the beginning of the document that will state essential details and how to contact your insurer.

The insuring agreement legally details exactly what is covered in your policy. It also explains how costs are assessed against policy limits, among other important details.

You’ll have conditions that require you to communicate with the insurer. You’ll always need to tell them when a claim is made against your company.

The insurance policy will also include endorsements that can exclude or add coverage types. It can also change clauses in your insuring agreement or redefine policy terms.

How Much Is Professional Liability Insurance?

You are quoted for your insurance policy once you apply. The cost of coverage will depend on these factors:

How common claims are in your geographical area
How common lawsuits are in your industry
How many employees you have
How much coverage you need
How long you’ve been in business
What kind of claims you’ve filed in the past

To save money on your insurance policy, pay in full for the entire year. This is more cost-effective than when paying monthly.

You should also bundle policies with Econosurance to save a significant amount of money protecting your commercial property.