How would your business respond — and can it survive — if a severe mistake that could cost a customer tens of thousands of dollars was made? Or, even more frustrating, what if a customer blames — and sues — your professional services firm for losses when you’re not at fault?
Professional Liability insurance is designed to protect your business against claims that professional advice or services you've provided caused a customer financial harm due to actual or alleged mistakes or a failure to perform a service.
In responding to a civil claim made by your customer, professional liability coverage can help your business:
What Types of Businesses Require Professional Liability Insurance?
Any business that provides its clients with expert guidance, information, or knowledge-based services — such as a bookkeeper, marketing consultant, or executive recruiter — can benefit from professional liability coverage. Certain specialised or licensed businesses like law firms, architecture and engineering firms can find professional liability solutions designed specifically for their sector. Likewise, media organisations such as publishers or broadcasters can seek coverage for their intellectual property through a media liability policy.
A broader range of service providers can seek coverage under a Miscellaneous Professional Indemnity policy. Even if your business works in a highly specialised niche, an insurer that provides Miscellaneous Professional Indemnity coverage may be able to write a customised policy for your specific needs, tailored to fit your services.
What Types of Claims are Made Against Professional Service Firms?
Professional liability claims range widely—from a client suing an accounting firm for negligence as it acquired a company based on accounts approved by the accounting firm but later it transpired that the accounts do not reflect the true value of the company, to an engineer being sued as a building they designed was proved to be inadequate for its surroundings and leaking water through the basement, to a manufacturer suing a consultant for recommending costly investments in new equipment that failed to lower production costs. However, they are generally based on a customer’s perception that a professional services firm has:
Your business can also help prevent professional liability claims from arising or limit their severity by taking key steps to limit errors and disputes in the first place. Explore Chubb’s professional liability solutions here.
© 2021 Chubb. All rights reserved.
No part of this article may be reproduced in any written, electronic, recording, or printed form without written permission of Chubb.
Disclaimer - The content of the above article is not intended to constitute professional advice. Although all content is believed to be accurate, Chubb Insurance Singapore Limited (Chubb) makes no warranty or guarantee about the accuracy, completeness, or adequacy of the content of this article. Users relying on any content do so at their own risk.
We help you stay ahead and informed with these helpful tips and tricks