If you operate your business as a professional, you will have additional insurance issues to take into consideration beyond the “basic” liability policies. General liability insurance, for example, often contain exclusions or endorsements that exclude professional services. Therefore, if your business is that of a professional, you will want to make sure you are covered for your services. For example, if you are a real estate agent and purchase a commercial general liability (“CGL”) policy that excludes coverage for professional services as a realtor, you will be quite disappointed if and when one of your clients ever files a lawsuit against you, as your CGL insurer will likely deny coverage. Therefore, we recommend making sure your liability insurance policy actually insures you as a professional. If not, because professional liability services are oftentimes excluded by other policies, you can purchase a professional liability policy.
As professionals, your business’ employees may be held to a very high level of care. Professionals in any given area of expertise will be expected to be knowledgeable in their area and will be held to the “standard of care” of a professional in their field. Professional liability insurance covers professionals for injury caused in the event of a breach of the professional’s duties to his or her client. Therefore, in the event that you make a mistake that damages your client, you will want to have professional liability insurance.
There are a variety of different types of professions for which businesses (including companies, partnerships and sole practitioners) may need to have professional liability insurance, for example, realtors, architects, engineers, dentists, doctors, lawyers, etc. In the event that your business operates in a field in which its employees have a special expertise, particularly one in which the employees have to be licensed in order to practice, you may want to consider whether your business needs professional liability insurance.