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How much does professional liability insurance cost?

The priciest premiums belong to businesses with the most potential for damage.


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Your premium for a professional liability policy depends on a range of factors from the dangers of your industry to your company’s size. Expect to pay higher insurance costs if an error from your company’s advice or services could lead to costly damage for your clients.

How much will professional liability insurance cost my business?

Your business might pay anywhere from $50 to $600 per month for professional liability insurance, depending on your business’s industry risks and size.

For example, here’s a break down of the expected yearly insurance costs:

  • Small or low-risk businesses with few employees: $600 to $1,000
  • Mid-range businesses with medium risk or several dozen employees: $1,000 to $3,000
  • Large corporations with high risk or hundreds of employees: $3,000+

Does my business need professional liability insurance?

Professional liability insurance (PLI) may not be required for your business, depending on state or local laws. However, in this day of many commercial lawsuits, businesses that provide professional advice or services should consider this liability coverage.

You could cause harm to another person’s reputation or physical health, because of the advice or work you provided. You may damage their systems, expose confidential details or cause a business to lose thousands of dollars. Also, you might need to defend against false claims for these types of situations.

Having PLI can mean the difference between a bump in your professional career and a devastating legal battle.

Which industries might benefit from professional liability coverage?

Some businesses provide higher-risk services than others, making them more expensive to insure. Businesses or individuals who might benefit from extra liability protection:

  • Accountants
  • Architects and engineers
  • Consultants
  • Counselors
  • Doctors, nurses and pharmacists
  • Land surveyors
  • Lawyers
  • Physical therapists or speech pathologists
  • Software developers
  • Teachers or trainers

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What factors affect the cost of professional liability insurance?

You probably won’t find a blanket price for professional liability insurance. Instead, insurance companies take several key issues into consideration when determining your cost:

  • Type of industry. Certain industries involve more risky activities, such as prescribing medication or managing investment accounts.
  • Business size. Coverage for an independent consultant will cost much less than a global company with hundreds of employees. More employees increase the chance of a complaint arising toward your business.
  • Number of clients. A business with many clients or top-paying corporate clients may see higher premiums because the potential for costly damage increases.
  • Amount of coverage. You can expect a higher premium if you buy PLI with high maximum limits.
  • Additional risks. Insurance companies will factor in different risks specialized to your business. Those risks can vary even within an industry if your business offers higher-risk services.
  • Industry standards. The level of coverage standard in your industry may cost more or less than the standard for other types of businesses.

How can I save money on professional liability insurance?

The following particulars may help you save money with PLI coverage:

  • Dialing down your company’s risk — Some insurers reward you for establishing a risk management program and improving weaknesses.
  • Sheltering multiple policies under one roof — Consider companies that offer a one-stop shop for all your business’s insurance policies. Then compare the cost with buying some low-cost coverage from a separate company.
  • Staying real about your risk — Stick with your legal or insurance professional’s advice for how much insurance your business needs. That way you can avoid over- or under-insuring.
  • Working with the professionals — Not convinced you’re finding the best deals for your company? Let a commercial insurance broker handle the shopping. Then, compare with your own findings.

Bottom line

Professional liability insurance might cost you a thousand dollars or more each year. But its protection could save your business’s bottom line and help you repair your reputation after a pricey lawsuit. You can squeeze the most value for coverage by shopping around for the best business insurance providers.

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