Insurance Real Guide » Professional liability insurance

Employers’ Liability Insurance – Needs and Nuances

admin — Mon, 22 Mar 2010 06:16:11 +0000

EL or the Employers liability insurance is an insurance policy that is compulsory and all the business owners are expected to own if they have employed people to work for them. If you happen to be the MD or the Managing Director of some of the limited company, then you are also required having the Employers liability insurance by law.

The Employers liability Insurance is basically designed for covering the employees. There are times when they fall a prey to any physical injury or untimely death and it gets proved that it was because of the negligence on your part as an employer that the accident occurred and thus you may have been able to prevent this loss that they underwent. In such cases, if the affected employee decides to pursue you, the employer for the compensation, it is the insurer who will then pay for the cost of those compensation claims. The indemnity insurance is not actually designed for covering you against any risks regarding being sued of the compensation claims by the employees like wrongful discrimination and sexual discrimination.

This insurance policy actually enables your business to effectively meet all the costs of the legal fees along with the compensation claims for the employees who are either injured or suffer any ailment due to negligence on your part as an employer. It is important that you know that the employee who is injured by the accident can also seek the compensation irrespective of the current status of your business. That is to say, even if your business goes in receivership or liquidation, the injured employee is liable to claim compensation and you will have to abide by the law.

So, you need to be well aware that the Employers Liability Insurance is basically concerned with the covering of the losses that your employees may undergo because of your fault. The compensation that they earn in such cases enables them to live their life while they are at home and unable to work. The compensation amounts though largely depend on who was at fault when the accident occurred, the employer or the employee.

Small Business Liability Insurance

admin — Sun, 21 Mar 2010 06:45:43 +0000

When you own and operate a small business, you need to be responsible and accountable for it. You may be operating it with utmost care and give your employees and your customers the best quality and services but some will still see it as you’re doing something wrong.

It is only practical to get small business liability insurance in order for you to be protected just in case something you don’t want to happen actually happens. By learning what all successful business entrepreneurs are aware of, you get to protect your business too.

One of the most often asked question is “who needs small business liability insurance?” To give you a background, 78% of American businesses are structured through some kind of partnership or sole proprietorship. The remaining percentage means that these are the small businesses.

The owners of these businesses must have some kind of ownership to protect their enterprises and to make these less risky as possible. The liabilities of any business are constantly challenging the business owner so he must be smart and have small business liability insurance.

There is an ongoing misconception on limited liability companies or incorporated companies. This is that the business owner is protected from liability insurance or personal insurance. This is not usually the case.

The business owner can be personally liable if he has signed a guarantee for the loan, injured someone first hand, have acted illegally or irresponsibly, or does not operate the business as an entity which is supposed to be separate.

So now that business owners are interested about getting small business liability insurance, they need to know exactly what it is. Well, for one, it protects the small business just in case there is lawsuit for property damages or personal injuries.

This will cover the damages and the legal costs. The small business liability insurance depends on the kind of business needs that the company provides. It can also be purchased in different forms.

When buying small business liability insurance, the owner must know the kinds that are available out there. Here are two examples. There’s the General Liability Insurance. This is the kind of business liability insurance that mainly covers and protects the business from advertising claims, property damages, and injury claims. This is generally known as the CGL or the Commercial General Liability.

The next is the Professional Liability Insurance. This is for business owners who provide services that have to be considered in order for these to be protected against negligence, errors, malpractice, and omissions. It depends on which industry the business is in.

What Is Liability Insurance?

admin — Sat, 20 Mar 2010 07:35:34 +0000

When you get into taking insurance, you have to check up on various aspects of insurance. There are many types of insurances and one of the most important is liability insurance.

Liability insurance is a form of insurance that protects a person from claims that have been raised by another party. Every person undertaking insurance should consider opting for this form of insurance because it provides protection from third party claims. For example, if your car was involved in an accident and the other party took up legal action against you for damage and looses as a result of the accident, car liability insurance can help you in meeting the expenses arising as a result of such actions.

You can find different types of liability insurance available. There is the general type of liability insurance, which protects you against third party claims and which also covers businesses. Another type is the D & O liability stands for “directors and officers” liability insurance. This form of liability insurance is to be taken by a company in order to protect themselves from legal action arising out of faults committed by an office or director of the company.

Many organizations opt for Employer Liability. This form of liability insurance protects the employer from employee related illnesses, damages, losses as a result of which the employee might sue the employer.

In case of individuals, those who are in professions that demand the use of their professional expertise, professional liability insurance is what is necessary. It is similar to malpractice insurance but it provides lesser coverage than this form of insurance and it is intended to protect the professional from legal actions that can arise from clients who use their expertise. Three can be situations where their expertise was not fully provided or there was a point of neglect which caused grievance to the client. In such situations, this type of insurance can be really necessary.

How to Choose a Liability Insurance Vendor for Your Business

admin — Fri, 19 Mar 2010 07:54:48 +0000

Liability insurance protects your company from financial damages if your company is sued by a third party. There are many types of liability insurance products and many businesses purchase more than one kind of liability insurance in order to ensure that they have the proper coverage. Different types of liability insurances cover different situations. Umbrella liability insurance policy may cover injuries on your property while professional liability, such as malpractice insurance, may cover a doctor that misdiagnoses a patient.

If a business does not have liability insurance, the business may lose critical assets in the event of a lawsuit or a guilty judgment. Additionally, the company could go bankrupt, depending on the damages that the company may have to pay in the event of a lawsuit. For this reason, choosing a liability insurance vendor is crucial. If you need help choosing a liability insurance vendor, click here.

In order to find the best liability insurance vendor, ask yourself the following questions:

Who or what needs the liability insurance? The business should have its own liability insurance, even if the business is a Limited Liability Company (LLC) which guarantees that the owners of the business will not lose their assets if there is a lawsuit against the company. However, LLC status does not safeguard the business itself. The company should also make an effort to protect high-profile, high-risk individuals.

What do we need to have covered? Does the business need coverage for Errors & Omissions? Does the business need any type of professional liability insurance? Does it need general liability? Umbrella liability? Workers compensation? Determine the risks that your business could face in order before choosing coverage.

Do we also need worker’s compensation? Many businesses are legally obligated to have worker’s compensation coverage. Check with your particular state’s Department of Labor to determine if your business is required to carry it.

What price am I able to pay for liability insurance? The cost of liability insurance varies by company, coverage, type of insurance, industry, size of the business and more. Make sure to get comparable quotes from at least three companies before deciding on one company to work with.

How large of a policy should I take out? The size of your policy may depend on the amount of money that your business brings in each year. Be sure to speak with representatives from your top vendor selections in order to determine exactly what kind of coverage you can expect from them and what the price for that coverage will be.

Does the vendor have a solid reputation? Always do a Better Business Bureau background check and a Google search for any complaints.

In order to ensure that you receive the best liability insurance policy and terms possible, make sure to do your research. Finding the right liability insurance company can mean the difference between thousands (or even millions) of dollars. If you want liability insurance vendors to compete for your business, click here. For additional information, you can visit our liability insurance wiki.

Media Liability Insurance

admin — Tue, 16 Mar 2010 10:02:08 +0000

As technologies advance, so grow new liabilities. Nowhere is this more evident than in the area of creating, storing, sharing and transmitting electronic information.

Previously, only the publishing and broadcast media industries needed to be largely concerned with liabilities related to copyright infringement, libel, slander and defamation. But today, when virtually every type of company now publishes websites, distributes emails and broadcasts electronic media, the need for media liability protection crosses all industry lines. Hi-tech companies that support the creation and distribution of electronic media for others are particularly vulnerable to these growing liabilities.

Enter Media Liability Insurance

In response to this growing liability and need for protection, the insurance industry has developed Media Liability Insurance. Essentially, this is a form of “errors and omissions” or “professional liability” insurance designed to protect firms from claims that allege financial loss due to the distribution of proprietary or false information. Liabilities that are typically covered include:

- Copyright and trademark infringement

- Defamation of character or product

- Personal disparagement

- Invasion of privacy.

Are You Vulnerable?

Consider: Your webmaster posts customer service advice on your website that, unbeknownst to you, includes copyrighted information. Your marketing team broadcasts a product-comparison email that includes false and damaging information about your biggest competitor. Your electronic brochure includes a testimonial from an industry heavyweight – only your sales department neglected to get that individual’s permission to use their name, words or likeness. Each of these errors or omissions by your firm can result in an expensive lawsuit, a sizeable judgment and a damaging hit to your firm’s pocketbook and reputation.

Coverage Concerns

Not all Media Liability Insurance policies are the same. Coverages and rights can vary significantly. In addition to comparing policy limits, deductibles and premiums, consider the following questions:

- When does coverage apply? Because Media Liability Insurance is written on a “claims-made basis, claims or incidences that could potentially lead to a claim typically must be reported to the insurer during the policy period.

- Where does coverage apply? Is international coverage included? This can be a critical concern for businesses that operate overseas.

- What costs are covered? Policies may or may not cover punitive damages. While all policies cover defense costs, some policies count these costs against your policy limits; others don’t.

- Who makes decisions? Who gets to decide whether to accept a settlement, you or your insurer? Who gets to select your legal counsel?

Virtually any business has media liability exposures. Careful management of information and Media Liability Insurance can go a long way to minimizing those risks.

Liability Insurance for Small Businesses

admin — Mon, 15 Mar 2010 10:14:41 +0000

There are over 80% of the businesses in United States that are run in partnerships or individually. For almost all of these small businesses, these kinds of ownership may put the business and individual at a liability risk. Having appropriate and adequate small business liability insurance can then protect your business and you from fiscal damage.
A general crisis for a limited company or an incorporate is that the trade owner may believe he is completely sheltered from individual liability and that liability insurance is not necessary at all! This however is not the case always, you tend to be personally liable if:

If you have signed up a guarantee for a personal loan If you happen to injure somebody personally Acting in an irresponsible manner Following illegal and corrupt business practices Not operating your business as a separate body

Business Liability Insurance

Business liability insurance safeguards and protects small businesses when there is a lawsuit or against personal injury and property damage. This insurance will cover the compensation for a lawsuit and other legal costs. There are several kinds of liability insurances depending on the size and kind of your business. They are:

General Liability Insurance: this is also know as Commercial General Liability-CGL and is one of the best insurances needed to protect your small business. General Liability Insurance covers personal injuries, property damage and false advertising claims. Professional Liability Insurance: Businesses that provide services are generally recommended to have this kind of insurance known as errors and omissions. This kind of insurance covers your business against errors and omissions, malpractices and negligence. Doctors, independent contractors and other technology consultants are required to carry Professional Liability Insurance. Product Liability Insurance: small businesses that are into selling and manufacturing consumer products are required to have this kind of insurance in case the consumer is affected by the usage of the product. The coverage amount and risk mainly depends on the kind of business you own. A scrap material retailer will generally have lesser risk than a kitchen stove maker.

Group Rates: most of the business groups and trade associations provide good benefits and lower insurance rates for their members if they become a part of their association

Coverage Amounts: Be sure to shop around and look for lower rates before you buy a Liability Insurance. Also make sure to assess the policy details to see what is included and excluded from the coverage!

Getting in touch with a Specialist Broker who has experience in working with the industry will enable you to get good rates and best coverage required for your small business.

How Your Professional Liability Premium Is Determined

admin — Sun, 14 Mar 2010 10:59:10 +0000

To those outside of the insurance industry it may appear that professional liability premiums are determined somewhat randomly by people with limited knowledge of the design profession. As a former underwriter turned broker, I am here to tell you that this misconception couldn’t be further from the truth. Your professional liability premiums are established through a process involving the assessment of several factors over which you have some power to influence. Looking through the eyes of an underwriter, design professionals can gain an edge in obtaining the best possible insurance premiums with the use of a thoughtful application submission. The article below describes the factors underwriters use in developing quotes for professional liability insurance. What your application tells underwriters
When an underwriter receives your application their immediate task is to evaluate your firm’s potential loss exposure. The two basic types of loss exposure are frequency and severity. Underwriters use the information on your application to calculate the probability of your firm experiencing claims over the life of the policy and furthermore, if you have a claim, how much it will potentially cost. However, before even considering the merits of an individual firm, insurance carriers already have defined what type of firm is a “good risk” for their company based on previous experience. They try to attract as many such firms as they can with various coverage differences and program enhancements but the primary lure is price. Their objective is to set a price that attracts good risks but still allows for an underwriting profit. This is complicated by the catastrophic nature of professional liability claims in the A/E industry. Losses tend to be quite large with a recent statistic stating that the average indemnity payment for a paid loss is upwards of $350,000. As a result, the many end up paying for the few. Design firms need to make their business look attractive to the insurance company in order to obtain the best possible terms. The first step in this strategy is to identify the different risk factors and then present your firm in the most positive way. While numerous factors determine the risk that your firm poses to an insurance company, for the purpose of this discussion we will focus on the most critical areas. Area of Practice
There is not much that you can do to influence an underwriter in this category. You are what you are. But it may be helpful to understand how the insurance company evaluates each discipline when it comes to their exposure to risk. The most common discipline in most insurance companies’ books of business is Architects. As a result, insurance carriers tend to use their rates for architects as base from which to determine rates for other types of firms. There are two disciplines that tend to pay a higher rate for their insurance than Architects: Structural Engineers and Geotechnical Engineers. Keeping in mind that underwriters are always thinking about exposure to loss, the question they asks themselves is ” what happens if there is an error in a structural calculation or a geotechnical report?” In many cases the project is stopped or even scrapped with a worst case scenario being a collapse. Because of this, Geotechnical Engineers take the unenviable position of paying the highest average rate in the industry with some carriers charging as much as two times what Architects will pay. Structural Engineers pay a much higher rate as well but they tend to be roughly 1.5 times more than Architects. The professional discipline seen as having the lowest exposure to loss and thus paying the lowest rate is Electrical Engineers. Going back to the basic underwriting question, if an Electrical Engineer makes an error, the damage and corresponding fix is usually far less than a foundation issue or an insufficient support beam. There are always exceptions but the claims statistics strongly support this evaluation. Positioned somewhere between Electrical Engineers and Architects sits Mechanical Engineers, Surveyors, and Civil Engineers with Civil Engineers having a rate that most closely resembles that of Architects. Location of Projects
The location of your practice or more specifically, the location of your projects, does have bearing on the rate that is determined for your firm. Claims statistics show that the probability of a loss on a building in Miami, Florida is much different than a building in Flagstaff, Arizona. There are many theories as to why this is the case, but the statistics clearly show that a higher rate is needed in most major metropolitan areas as opposed to most rural areas. Again, there are exceptions to every rule, but the statistics on this topic are definitive. Type of Projects
Rate factors in the area of project types, more so than any other, presents the greatest amount of differentiation amongst the various insurance carriers based on their individual statistics and beliefs. Understanding the “sweet spots” of the different carriers and matching your firm’s characteristics with the best markets is the job of your insurance advisor, your broker. As a design professional, you cannot possibly know all of the different markets and specifically which markets best suit your firm. In general, project types that are seen as the least “risky” in the eyes of the insurance company are those which tend to have less individuality in the design and have less emotional attachment than other project types. This includes projects such as office buildings, banks, retail, and most commercial projects. Project types that tend to be more of a challenge from a risk perspective are those which are more unique to their individual locations and have a much greater bodily injury exposure than the others. They can also run quite large in scale which increases the physical damage exposure exponentially. These include schools, jails, industrial plants, bridges, parking garages, and stadiums. Finally, the projects that are considered to be high risk are residential projects, swimming pools, harbors and docks, mines, and amusement parks and zoos. The project type with the highest perceived risk is condominiums. The industry has determined that for every premium dollar received by the carrier for a condominium project, 3.5 dollars goes out. All of these projects either carry a high emotional factor from the end user or have a high inherent catastrophic loss exposure such as a mine or amusement park. It is not the intent of this article to discourage any design firm from performing services on high risk projects but it is prudent to understand the exposures and manage the risk as well as possible. Internal Risk Management
Your firm’s internal risk management practices provide the best opportunity for you to differentiate your firm and illustrate to the underwriter why you are worthy of their absolute best rate, the rate that is given to the “best in class” type firm. Throughout the application are questions that on the surface seem benign and unimportant but they are there to paint a picture of the firm for the underwriter that goes beyond the discipline and project types. These questions include, but are not limited to, use of written contracts, limitation of liability provisions, insured sub consultants, types of contracts, in-house education programs, attendance at risk management seminars, and professional society memberships. Individually and collectively these categories allow for the underwriter to apply debits and/or credits based on the responses given. In some cases the difference can be as much as 25%. The unfortunate reality is that far too few firms are properly advised by their insurance representative as to the effect of these questions and thus do not enjoy the premium reductions associated with them. Again, it pays to be with an expert that knows your business and the ever changing marketplace. Loss History
The area of risk that is perhaps most quantifiable is loss history. As was mentioned earlier, when a design firm does have a legitimate claim, they tend to be quite expensive. There also is a belief in the underwriting world that past claims are a pretty fair indicator of potential future claims activity. As a result, a firm with claims in their past generally pays a much higher rate than a similar firm with no claims. The industry standard is to look five years into a firm’s past for claims activity but it is not uncommon for a carrier to look ten years back when evaluating a larger firm. The key for any design firm with a claim is to take the time to effectively articulate the circumstances regarding the claim and the lessons learned. In some cases, given the right approach and documentation, a firm along with its broker, can convince the carrier that it is an even better risk than a firm with no claims because of the experience and knowledge gained from the unfortunate situation. Setting the price
Underwriters’ thorough review of these and other factors gives them a profile from which to develop a specific rate for your insurance. The rate is applied against your professional fees and a premium is determined. The premium is increased as the limits of liability desired increases. Conversely, the premium is decreased as the deductible that is carried increases. Summary
Looking through the eyes of an underwriter, design professionals can gain an edge in obtaining the best possible insurance premiums with the use of a thoughtful application submission. However, an application does not speak for itself. As your professional liability insurance broker, we work with you to understand your practice and gather mitigating information on the areas that underwriters perceive as risky. Then, we negotiate with underwriters to favorably characterize your firm and prove the mitigating information to encourage the most competitive premium quotes. Integral to this task is our specialized knowledgeable and complete focus on the A/E industry.

Liability insurance – ensuring wellbeing of a professionals’ future

admin — Sat, 13 Mar 2010 11:32:30 +0000

In todayâ??s fast-paced world, buying an insurance cover not merely remained to be an option but more of a necessity for every professional. Buying an insurance cover does not in any way aborts occurrence of an unforeseen event; but definitely minimizes its after effects.

Most sensible individuals would recognize the importance of buying an insurance cover. It not only indemnifies you of unforeseen contingencies but most importantly ensures your mental peace. It wards off your tension and worries regarding the future contingencies and ensures a life sans quandaries and stress. Most of us perceive insurance as a way of buying cover for assets, health and also for insuring your future. It is really strange about the way we perceive assets. For in most cases we forget to include our profession among our list of assets which is the sole pillar of our financial wellness. Like ever other life’s possessions.

The need for professional liability cover is felt mostly in case of lawyers, real estate agents, accountants, and software developers. In the course of professional conduct, the client expects some degree of perfection and in case he is not satisfied with the business, he is empowered to file suit against the company and claim compensation thereof.

An unfortunate act like this can badly affect one’s professional reputation and paralyze his/her financial standing. The compensation claims filed thereof create huge outlay of funds which jeopardizes the financial stability of the professional.

If you come in contact with the general mass in the course of your business, there may be cases that a particular product or service may cause grievous injury to public health â?? be that of a mass or of single individual. Leaving product and services related to selling or distribution of commodities, there are several means by which a business activity may pose out as a threat to public properties. In order to protect it from paying for damages and compensation, it is best recommended to opt for public liability insurance.

Liability insurance is a must have for freelance experts â?? not just to protect self but also to protect the well being of other employees working for the organization. Buying a liability insurance cover takes care of your as well as your team interest and saves excessive outlay of funds. An employer’s liability insurance also covers legal cost of the claim; you own legal fees and also the fees of the claimant.

In some countries, buying an employer’s liability insurance is a legal requirement on the part of the employer.

Mandatory or not, taking a shelter under the cover of professional liability insurance is a requirement that needs to be identified for the wellbeing of the future of a professional.

Applicability of Professional Liability Coverage

admin — Fri, 12 Mar 2010 12:10:44 +0000

Insurance protects a person or a business from specific risks including anything from theft to natural disasters. In a business, you have to face significant and costly risks. You are responsible to your property, employees and the clients of your business. You need an insurance to cover the risks and to protect your business from any adverse financial situations. Professional liability insurance is offered by insurance companies, to meet the specific needs of certain professional fields. The professional liability insurance is commonly known as errors and omissions insurance.

Professional liability insurance coverage is applicable to the negligence connected with your profession which may cause financial damages. An accountant is expected to abide by a prescribed code of conduct and manner and any violation of principles could lead the accountant liable for damage or harm caused to others. Likewise, a management consultant must stand by the professional expectations or else be subject to resulting damages and liability suits. The liable coverage varies with different professions.

When professionals in various fields are hired, it is assumed that they possess the required knowledge and expertise. They become legally liable when they fail to meet the standards expected of them. Professional liability insurance protects you and your profession from the huge cost of litigation. Even though you may execute your professional duties very well, still you may be sued. No matter the suit is false or not, you may have to spend time and energy as well as litigation costs to defend yourself.

Professional liability insurance assists you to respond to the risks faced by you in your job. Professional liability insurance covers the direct and indirect consequences of your professional conduct. As a professional, you have to be careful in carrying out your duties. Even a telephonic advice to one of your clients may make you liable for the conduct.

A business is directly concerned not only for the damages and harm caused, but also indirectly concerned with its consequences. Professional liability insurance limits and controls the risks of putting your business and yourself in financial jeopardy by protecting your professional interests. In the recent past, the scope of professional liability insurance has significantly broadened to include a wide area of business management. Professional liability insurance is an essential and special element of your business.

Selecting-professional-liability-insurance

admin — Thu, 11 Mar 2010 12:36:35 +0000

Your professional liability insurance broker can deliver services of great value. This is as it should be, for you are paying for those services. Carefully selected and advantageously used, your broker can be as important to the management of your practice as your accountant or your attorney. Poorly selected and ill-equipped to advise you on the risks of professional practice, your broker may add little more of value to what you do than the cost of a few postage stamps at renewal time. The choice is yours.

There are many people in the Business Liability Insurance, but finding the one broker best for you can be somewhat problematic. For one thing, your broker can be of real help to you only if he or she has a comprehensive understanding of what it is you are all about. Not all do. For another, the most valuable services your broker can deliver require an investment of time and resources few are prepared to make. Fortunately, there are knowledgeable brokers throughout the country who have made that investment. Your challenge is to find one you can rely on with confidence.

What a Good Broker Can Do For You

Your broker, first and foremost, is your advocate in the professional liability insurance marketplace. A good broker will know what the markets are doing, who the underwriters are, what they are looking for, and how to present your firm in the best possible light. This requires a thoroughgoing knowledge of the applications for insurance and a clear understanding of what the questions really mean, how the information being requested is likely to be interpreted, and how that information can best be communicated to the underwriters. The cost of your insurance will depend on this knowledge and on the skill and attention to detail with which it is utilized on your behalf.

A skilled professional attorney liability insurance broker will be experienced in dealing with the underwriters in both hard and soft insurance markets. Today’s promises and prices may be real, or they may be of fleeting value. To evaluate the differences, you need competent, independent advice from a broker who is capable of a long look down the road ahead. Experienced brokers have been down this road before, and the value of the advice you receive as you seek to sort out the trade-offs between coverage options, company services, and premium dollars depends on that experience.