What is Professional Liability insurance coverage?
Professional liability insurance can help protect business owners in North Carolina if they or one of their employees makes a business mistake or faces an accusation of professional negligence.
North Carolina professional liability insurance can help cover:
- Mistakes related to your profession that cause financial harm to a client or customer
- Allegations of professional negligence, such as wrongdoing or inaction
- Misrepresentation of services
Professional liability insurance can help pay for related costs in many types of situations, whether you made an error or a client claims that you did. For example:
- A Charlotte insurance agent forgets to remind a client to renew an auto insurance policy. A day after the policy expires, the client crashes into another car, which causes significant damage. Professional liability insurance in Charlotte could help the insurance agent cover related costs.
- A client in Ralaigh sues an interior designer for using copyrighted material in their advertisements. Professional liability insurance in Raleigh can help the designer with legal costs for defending their business.
What is the difference between Professional Liability and E&O insurance?
Another common name for professional liability insurance is E&O, or errors and omissions insurance. North Carolina businesses may use these terms interchangeably depending on their industry.
Professional liability and E&O insurance usually provide the same coverage. However, the term E&O is favored by property managers, real estate agents and insurance agents. There is also a distinct contractor’s E&O for professionals in the construction industry.
Professional liability is the favored name for this insurance in most other sectors, including lawyers, architects and financial planners.
Is Professional Liability insurance required in North Carolina?
Most businesses in North Carolina are not required to have professional liability coverage. However, you may need this insurance to meet certain industry standards.
For example, if you intend to work on government contracts, you may be required to have a professional liability policy. Similarly, healthcare workers often need malpractice insurance, a type of professional liability coverage.
Even when it’s not required, it can be beneficial to have professional liability or E&O insurance. North Carolina business owners often choose this coverage for important protections such as:
Financial protection
Unexpected costs can be challenging for small businesses. With professional liability coverage, business owners may be better financially protected if they make a professional mistake or are accused of negligence.
Licenses and permits
Depending on the type of work you do and the city where you work, you may need professional liability coverage to obtain or renew some business licenses and certifications.
Work contracts
In some industries, it’s common for clients to require a certificate of insurance before agreeing to work with you, especially on high-cost projects. Without professional liability insurance, you may not be able to secure these contracts.
For example, professional liability insurance is required by Alliance Health for all providers in an amount not less than $1 million per occurrence and $3 million annual aggregate. Alliance is the publicly funded behavioral healthcare network for Cumberland, Durham, Johnston, Mecklenburg, Orange and Wake counties.1
What types of businesses might need Professional Liability in North Carolina?
Most businesses offering professional services, such as insurance agents, business consultants and accountants, choose professional liability insurance as common coverage.
However, businesses across countless industries can benefit from this type of North Carolina business insurance.
Since most businesses risk making a mistake that could cause financial harm to someone else or could potentially face accusations of wrongdoing or negligence, there can be benefits to having professional liability insurance. North Carolina businesses with this insurance coverage may be able to get help resolving these issues quickly to help protect their business and reputation.
For instance, if a property owner in Durham claims that a real estate agent made repeated mistakes on the paperwork for transitions between tenants that cost him $50,000, it can help to have real estate E&O insurance. North Carolina agents could get help to cover related expenses needed to defend themselves with this coverage.
Or, say, an architect in Greensboro has a client that alleges that a mistake the architect made in their designs led to the collapse of a stairwell and sues them for causing injuries. Professional liability insurance can help the architect cover related costs or defend against accusations.
How much is Professional Liability insurance in North Carolina?
Costs for North Carolina professional liability insurance coverage vary based on several factors, including:
- The type of work that you do
- Where you do business
- Your work experience
- The number of employees that you have
- How high you set your limits
- Your history of insurance claims
AT NEXT, it’s easy to get affordable North Carolina professional liability or E&O insurance online in around 10 minutes. Our monthly premiums for this type of business insurance cost $45 or less for 52% of our U.S. customers.
Learn more about professional liability insurance costs.
How NEXT Insurance helps North Carolina businesses
NEXT provides professional liability insurance policies for North Carolina small businesses and self-employed workers.
It only takes about 10 minutes to get a quote, review your coverage options, choose your policies and download a certificate of insurance.
Start an instant quote online today.
Our team of licensed insurance advisors is standing by to assist you if you have any questions along the way.
