Professional liability insurance, which is also called errors and omissions insurance, is an important type of insurance that can help protect businesses and individuals from claims related to professional services. These claims can be expensive and hurtful to a business’s reputation, so it is important for businesses and people who offer professional services to have professional liability insurance. But the price of professional liability insurance can vary a lot depending on many things. In this blog post, we’ll talk about how much professional liability insurance costs and what kinds of things can make the price go up or down.
Cost of Professional Liability Insurance Depends on a Number Of Things
1. Industry: The field you work in can have a big effect on how much your professional liability insurance costs. High-risk industries, like healthcare or technology, may have higher premiums than low-risk industries.
2. Type of service: The cost of professional liability insurance can also depend on the type of service. High-risk services, like financial or legal services, may have higher premiums than low-risk services.
3. The number of claims a business or person has made in the past can also affect how much professional liability insurance costs. People who have had claims or lawsuits in the past may be seen as a higher risk and may have to pay more for their insurance.
4. Coverage limits: The cost of professional liability insurance can also change based on how much coverage you choose. Most of the time, higher coverage limits lead to higher premiums.
5. Deductible: The deductible is the amount you have to pay out of pocket before your insurance coverage kicks in. If you choose a higher deductible, your premiums may go down, but if you make a claim, you may have to pay more out of pocket.
6. Location: The cost of professional liability insurance can also be affected by where your business is. Premiums may be higher in places where living costs are higher or where people are more likely to file claims.
7. Size of business: The cost of professional liability insurance can also depend on how big your business is. Larger businesses may have to pay more for insurance than smaller ones.
How Much Should You Expect Professional Liability Insurance to Cost You?
The price of professional liability insurance can be very different depending on all of the above. But in general, the cost of professional liability insurance can range from a few hundred dollars to a few thousand dollars per year. Here are some examples of average premiums in different industries:
● $1,000 to $5,000 per year for health care
● $1,000 to $5,000 per year for tech
● From $1,500 to $7,000 per year for financial services
● From $2,000 to $10,000 per year for legal services
● $1000–$5000 per year for consulting
Keep in mind that these are just average premiums, and your actual premium may be higher or lower depending on your specific situation.
Tips for Getting Professional Liability Insurance for Less
Professional liability insurance can be very expensive, but you can take some steps to lower your premiums:
1. Don’t settle for the first price quote you get. Compare prices from different insurance companies to find the best deal.
2. Choose a higher deductible. Choosing a higher deductible can lower your premiums, but be sure to choose a deductible that you can pay if you need to make a claim.
3. If you have had claims or lawsuits in the past, you should take steps to improve your claims history. This can mean doing things like using better risk management techniques or getting more training.
4. Use risk management practices: Using risk management practices can help reduce the number of claims, which could lead to lower premiums.
5. Consider combining insurance policies. Your premiums may be lower if you combine your professional liability insurance with other types of insurance, like general liability insurance.
Professional liability insurance is an important investment for businesses and people who offer professional services. Even though the price of professional liability insurance can be high, it’s important to think about how much a claim or lawsuit could cost. By knowing what makes professional liability insurance expensive and taking steps to lower your premiums, you can make sure you have the coverage you need at a price you can afford.
When looking for professional liability insurance, make sure to work with a reputable insurance company that can help you understand your coverage options and find the best policy for your needs. With the right coverage, you can protect your business and your way of life from the risks that come with providing professional services.