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Protect Your Sole Proprietorship With Professional Liability Insurance
As a sole proprietor, you’re the owner of your business. This means you’re also personally liable for any business debts or obligations. Unlike other business structures, like a limited liability company (LLC), your personal and business assets aren’t separated. So, it’s important to make sure you have the right types of business insurance coverage to help protect you and your company.
One important coverage you may want to consider is professional liability insurance for sole proprietorships. Professional liability insurance, or errors and omissions insurance, helps protect your business in case you get sued for mistakes in the professional services you’ve provided. Even if you don’t make a mistake, your customers or clients can still sue you.
Learn more about this type of sole proprietor insurance, what it helps cover and how it can help you.
What Does Professional Liability Insurance Cover for Sole Proprietorships?
Professional liability insurance for sole proprietorships can help cover claims of:
- Negligence
- Inaccurate advice
- Misrepresentation
- Failure to protect personally identifiable information (PII)
If your business gets sued, this insurance can help pay for your:
- Legal costs
- Defense fees
- Lost income if you have to attend a trial or deposition
Be aware that professional liability insurance doesn’t cover all business liabilities. You’ll likely need other types of small business insurance to get comprehensive coverage.
Professional liability insurance for small businesses won’t help your business with claims of:
Bodily injury or property damage, so you’ll need general liability insurance to help cover these kinds of claims.
Employee injuries, which a workers’ compensation insurance policy can help with.
Business interruption due to covered property damage. A business income insurance policy can help cover this type of claim.
What Professional Liability Does a Sole Proprietor Have?
If you’re the sole proprietor, it means you’re personally liable for your business. That means you’re responsible for all claims, debts and duties. With a sole proprietorship, there’s no separation between business and personal assets. That’s why it’s important to have professional liability insurance.
Let’s say you don’t have coverage and your client sues you for a mistake in the professional services you’ve provided. You’ll have to pay for your defense costs and any judgments or settlements. And if you can’t afford it, your personal assets will be at risk.
How Much Is Professional Liability Insurance for a Sole Proprietor?
Every business is different and has unique needs. So, professional liability insurance costs vary. You may pay between $150 and over $2,500 a year for a professional liability policy. An insurance company uses different factors to determine your rate. These factors can include:
- Years of business experience
- Claims history
- Lugar
The best way to find out how much this insurance will cost your business is to get a cita.
Does a Sole Proprietor Need Professional Liability Insurance?
It’s important for sole proprietors that provide professional services or advice to have professional liability insurance. Some types of businesses that may want to consider this coverage include:
- Accountants
- Advertising agencies
- Bookkeepers
- Consultants
- Graphic designers
- Home inspectors
- Real estate professionals
- Technology businesses
Obtenga una professional liability insurance quote and see how we can help protect your business.