Examples of Professional Liability Insurance

September 18, 2014

Example Risks by Profession

Read the claim examples below to find out how professional liability insurance can help protect other small business owners like you.

IT Consultant

Network security issue: You are hired to review your client’s website and network security in order to implement new procedures where you find weaknesses. A month after you complete the project, your client’s website gets hacked and they lose revenue from the site being down. Your client accuses you of faulty work. Professional liability insurance protects you against claims of negligence even if you haven’t made a mistake.

Business Consultant

Project management out of control:  You have been contracted by a client to come in and organize a project that has run past its due date and is over budget. You commit to bringing the project to completion. As you dig into the project you realize that the former project manager did not present your client with an accurate view of deliverables and you are facing a scope of work that is twice as long as your original projection. When you present this finding to your client they are angry and accuse you of not doing your due diligence of project review up front before signing the contract. Professional liability insurance protects you against claims of negligence even if you haven’t made a mistake.

Real Estate Agent

Buyer’s remorse: With the continued decline of property values, clients may  blame you for feeling like they overpaid for their new home.  You could face a claim that you were negligent in researching the home’s value.  Professional liability insurance will protect you even if you haven’t made this mistake and the allegations are groundless.

Esthetician

Treatment Gone Wrong:  An esthetician applies a chemical peel to the client’s skin, but the client had recently had a lot of sun exposure, and the peel causes painful and unattractive skin burns. The client sues the esthetician. Professional liability insurance protects you if such a claim is made.

Engineer

The wrong advice:  You advise a client to purchase a particular style of ramp for disabled individuals that you believe meets ADA standards. Turns out you were wrong, as the ramp has been outdated for some time. If you are required to appear at a hearing as a result of this error and resulting code violation, professional liability insurance will pay up to $5,000 to defend you.

Professional liability insurance provides your business with the security you need; to know that unintentional errors and unsatisfied clients won’t be fatal to your business.

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