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The Risks of Going Without Professional Liability Insurance
Posted on: February 26, 2016 by Newmark Insurance
Real Estate Professional Liability Insurance is an essential coverage for any firm to include in their business portfolio. This policy covers a wide range of risks that any company who offers professional services may face. With that said, the risks of going without this coverage can be devastating. Claims arising against firms have the potential to devastate the business, especially smaller ones that don’t have the financial resources to recover. Let us take a closer look at the risks that businesses face without professional liability coverage.
Cavignac & Associates defines professional liability insurance, or errors and omission insurance, as malpractice insurance and it is purchased by architects and engineers as well as doctors, lawyers, accountants, real estate brokers and other licensed professionals to address business liability risks that arise from rendering professional services.
The financial damages of claims without this type of coverage can bankrupt a company. For example, Tech Insurance states that the average cost of a court settlement from a professional liability dispute is $475,000. What’s more, companies can typically be forced to raise prices and cut hiring or even lay off existing employees as a result of an expensive claim.
The annual cost of professional liability insurance varies, but it typically ranges from 1-3 percent of a company’s annual revenue, depending on the number of employees they have. Therefore, this small fee far outweighs the costs of being sued without insurance.
It is important to note that professional liability coverage is required by most states. In addition, if a company was to face a legal issue without insurance protection, they could be subjected to more fines and penalties, including suspension. Bear these facts in mind when determining whether or not to forego such important coverage.
At NewMark Insurance Services, we specialize in protecting the real estate sector. By safeguarding your assets with our comprehensive professional liability policies, you can achieve peace of mind and release your firm of financial obligation. For more information about our products and services, contact us today at (855) 777-6549.