Insurance Protection: A Top Priority for Professionals
August 18, 2010 10:08 am 183There are few things that can make a business owner’s heart skip a beat more than being served with a notice of pending legal action. At that point it is too late to start verifying insurance coverage. No matter what profession is being practiced, the odds of being sued at some point are statistically significant, so planning for that inevitability is critical. If there is an appearance of deep pockets, the likelihood of someone trying to pick those pockets is high. There are three common types of insurance that are used to protect the assets of professionals: medical malpractice insurance, professional liability insurance and workers compensation insurance.
Medical malpractice insurance is carried by many medical professionals for protection from financial catastrophe in the event of a medical error. While medical professionals may use a variety of ways to shield their assets, malpractice insurance is probably the most commonly used method. Courts in many jurisdictions have been shown to award huge amounts of money to compensate victims of medical malpractice, which could leave many professionals without any remaining assets. The coverage is not required in many states, but not being covered is inviting disaster.
The second form of coverage a variety of professionals elect to carry is professional liability insurance. In some respects, it is similar to medical malpractice coverage, but can be tailored to meet the needs of professionals in many business arenas. For example, real estate professionals are required to carry professional liability insurance along with errors and omissions coverage in most areas, but even if it was not required, it would certainly be a wise investment. Teachers (especially male teachers) carry professional liability coverage to protect them against claims of improper conduct involving students. Another related form of coverage required for employers is workers compensation insurance. Business owners who neglect to obtain this coverage will almost certainly be held personally liable if an employee is injured on the job. A business can be destroyed virtually overnight if an employee is seriously injured and there is no workers compensation insurance policy in place.
Visiting with a business insurance professional to determine which coverage is best for a specific profession is always recommended, as one incident can have disastrous consequences where coverage is not in place. Proper legal defense alone will generally justify the expense, and in the event of a negative finding in court, having proper coverage may well avert total financial ruin.
