Essential Coverages for Professional Services

Cash flow, payroll and customer service. These are the things that can keep a small business owner up at night. Being sued may not be one of them. But mistakes happen. And the truth is, a business can be sued by a client even if the business owner believes they did nothing wrong. Lawsuits can be expensive – even if your customer wins.

That’s why Professional Liability (PL) or Errors and Omissions (E&O) coverage is a must for any business that gives advice or provides professional services for a fee. The Hartford offers PL or E&O coverage to 55+ professional services classes. Here’s a quick overview of the key program features and the classes we’ll write.

A Higher Standard of Features for Claims-Made Coverages

  • Class-specific endorsements that reflect the professional services provided by a wide range of professional services companies
  • A broad range of coverage limit and deductible options1
    • Coverage limit: $10,000 – $5MM
    • Deductible: $0 – $25,000
  • Coverage options that help maximize protection
    • Extended Reporting Period (ERP)2
    • An eligible claim made and reported to us after policy termination will be covered as if it was reported during the policy period. This provides your customers with extended protection, helping to avoid a coverage gap.
    • Defense in Addition to Limits3 provides your customers additional money to pay their defense costs.
    • Disciplinary Proceedings Coverage – pays costs which your customer incurs as the result of having to appear before a regulatory or governmental disciplinary official.
    • Supplementary Payments – reimburses your customers for lost income and other non-legal expenses which they may incur in the defense of a claim.
    • Subpoena Assistance – provides your customers with a lawyer should they be required to testify in a lawsuit to which they are not a party.
  • Full Prior Acts4
    • Most business owners purchase insurance to help protect them from the unknown. Many think of the unknown as future events. However, full prior acts coverage protects against unknown errors or omissions that took place prior to the policy’s effective date, regardless of how far in the past. This feature is automatically included for most classes and can offer customers a greater sense of security.

For full list of options, click here.  

1Available options vary by type of business and by state.

2Availability and options vary by state; coverage must be requested and approved. The claim must arise out of the wrongful act or personal injury that occurred after the retroactive date and prior to the end of the policy period.

3Some states require that certain limits of defense costs be offered in addition to damage limits. As such, defense in addition to limits will be included automatically with Professional Liability coverage in those states.

4Prior Acts coverage for Accountants, Tax Preparers and Business Consultants must be requested and approved. Various options for Prior Acts coverage for these classes are available.

This article was published in the January 2020 edition of Colorado Insurance News (COIN). To view more articles and read the whole COIN, click here.

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