Business Professional Insurance
Business Professional Insurance
What is Business Professional Insurance and How Does it Work?
A business professional insurance covers costs associated with liability claims and property damage. Without this insurance, you may have to spend from your contingency reserve or from your company’s profits for legal expenses related to dealing with lawsuits. This may be financially devastating for your company, especially if the lawsuit involves paying a hefty sum of money. However, getting business professional insurance can help save your company from such a financial disaster, provided you pick the right insurance policy.
At Koba Capital, we pick the best business professional insurance on your behalf while keeping your best interests in mind. Let us know your annual budget for paying premiums and the average coverage you expect; we will come up with a few policies that not only match but exceed your expectations.
Sometimes, you don’t know which policy is suitable for your business because of the complicated terms and conditions. We will explain the pros and cons of different policies, but before that, you should know about the three types of business professional insurance that your company can benefit from:
- Professional liability insurance
- General liability insurance
- Product liability insurance
Professional liability insurance
Professional liability insurance protects professionals like lawyers, physicians, and accountants against negligence, errors, malpractice, misrepresentation, or omissions related to their services. This type of insurance also comes in other names, such as errors and omission insurance for real estate professionals, medical malpractice insurance for doctors, nurses, and anyone involved with the medical profession.
You may not find professional liability insurance under business-owners’ policies, in-home business policies, or homeowners’ endorsements. Instead, it only covers the claims made within the policy period. For example, if you don’t renew your policy for the next accounting year, the insurance company won’t cover the claims should they occur even a day after the policy lapses.
A lawsuit may end up costing you thousands of bucks. You need not pay so much if you have professional liability insurance. At Koba Capital, we recommend the best policies, depending on your business size and your budget.
General liability insurance
General liability insurance is suitable for small and medium-scale businesses. It safeguards your business financially if you face lawsuits due to a bodily injury of a client within your office premises or damaging someone else’s property during the course of providing your service. You should remember that a general liability insurance policy has various exclusions, and professional services is one of them.
Your general liability insurance will protect your business from the following:
If your client, third-party, or delivery person gets injured within your business premises, they can initiate a claim or file a lawsuit against you. For example, if a customer faints inside an elevator because the elevator stopped working midway, the customer can file a lawsuit. Your insurance policy can protect you from spending a huge amount of money on lawsuit expenses.
Property damage may result in a costly lawsuit against your business. Suppose you have a catering company. You are working at a client’s house when a couple of your employees spill oil on an expensive carpet, leading to a stain that doesn’t go away. The client can file a property damage lawsuit against your business. We can recommend the best policies with a lump sum coverage that can pay for these expenses.
Product liability insurance
Product liability insurance protects your business from claims made by customers after using your products. Without product liability insurance, your company needs to pay for product-defect-related claims from its own pocket. Some of the expenses that product liability insurance will cover are the following:
Lawyer’s fees and legal expenses to fight the lawsuit.
Settlement expenses decided by the judge against your business.
The need for product liability insurance arises when customers complain about your company’s products.
Here are three things you need to be particularly familiar with:
This issue is usually present even before you make the product. It suggests that there’s something inherently wrong with the product design, potentially making it unsafe for end-consumers. If a customer complains or sues your company for the product’s defect in design, your product liability insurance will kick in and cover the expenses involved in fighting the case.
A manufacturing defect arises while making the product. Sometimes it can be due to wrong assembly or maybe a part of the product was missing. These can come back to haunt your business if customers file a case against your company.
A marketing defect involves setting wrong expectations to customers while promoting your products. For example, lack of safety warnings, incorrect food labels, or insufficient instructions on how to use a product.
Koba Capital has experienced professionals who can offer an over-the-shoulder approach as you choose the best business professional insurance policies for your company.
Call us at (646) 543 – KOBA (5622) to set up an appointment at your convenience.
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