Running out of cash is one of the biggest reasons businesses failed last year.
If you're serious about protecting your company, having the right insurance is crucial. Two common options are professional liability insurance and errors and omissions insurance.
Understanding the differences between these insurance types can make a huge difference. If you'd like to safeguard your brand, read on to learn about professional liability vs. errors and omissions.
What Is Professional Liability Insurance?
Professional liability insurance can protect both professionals and their businesses. That way, you won't have to be worried about claims of negligence.
This protection is particularly important for people and companies in fields like healthcare, law, and consulting.
You can breathe more easily knowing this insurance can cover legal fees, settlements, and more. It's essential for those who offer specialized services or professional advice.
What Is Errors and Omissions Liability Insurance?
Errors and omissions insurance serves a similar purpose to professional liability insurance. Keep in mind that E&O insurance is not limited to professional services. It also covers errors, mistakes, and omissions related to products and more.
This insurance benefits many businesses, including manufacturing, technology, and other industries.
The Key Differences Between the Two Types of Insurance
The major difference between these two options is the scope of coverage. PLI focuses on professional services. E&O insurance covers a wider range of errors and omissions.
PLI is often industry-specific and tailored to the needs of professionals. This can include everyone from doctors to lawyers and consultants.
Conversely, E&O insurance is more suitable for a broader range of businesses.
Depending on different factors, professional liability insurance might be a legal requirement. For example, doctors and lawyers might need PLI to run their practice. E&O insurance is not often mandated by law but is still a wise choice.
The cost of insurance premiums can vary. Professional liability insurance may be more expensive because the coverage is tailored. E&O insurance has a broader application, so it tends to be more affordable.
Choosing the Right Insurance Options
Start by considering the nature of your business and its potential risks. Professional liability insurance is likely your best choice if you provide professional services. This can include medical care, legal advice, or something else.
Is your business at risk of product and service mistakes that could lead to financial losses? If so, errors and omissions insurance may be the better option.
Consulting with an insurance professional will make the choice easier.
Now You Can Choose Between Professional Liability Vs. Errors and Omissions
Has someone asked you about professional liability vs. errors and omissions? With the information from this guide, you can help them make a confident choice.
Feel free to rely on the team at Tom Needham Insurance Agency. Our expertise runs from business insurance to home insurance and beyond.
We'd be more than happy to consult you and determine the best coverage for your situation. All you have to do is touch base with a Tom Needham team member today.
