What is Professional Liability insurance coverage?
With professional liability insurance, Arizona business owners and their employees if they are held responsible for business mistakes or face accusations of negligence.
Professional liability insurance can help cover:
- Professional mistakes that cause another person or business financial harm
- Accusations of inaction, wrongdoing or professional negligence
- Misrepresentation of your services
Businesses may be able to submit a professional liability insurance claim if they make a professional mistake or if a client just claims that they did. Here are some situations where this type of insurance could help:
- A client sues a Tempe financial advisor for using copyrighted material in their advertisements. A professional liability insurance policy can help the advisor cover the costs to defend their business or fix the mistake.
- A Phoenix insurance agent has to pay a lawyer to defend their case in a disciplinary hearing by a professional review board. Professional liability insurance in Phoenix could help cover legal fees and related costs.
What is the difference between Professional Liability and E&O insurance?
Another term that describes professional liability insurance is errors and omissions insurance, or E&O.
Professional liability and E&O are often used interchangeably but typically refer to the same coverage in Arizona. Errors and omissions insurance is used mainly by real estate and insurance professionals, and there is also a contractor’s E&O for construction professionals.
Most other professionals, such as accountants, engineers, architects and lawyers, call this insurance coverage professional liability.
Is Professional Liability insurance required in Arizona?
Most businesses in Arizona are not required to carry professional liability or errors and omissions insurance. Arizona business owners may need this coverage to meet individual industry standards, however.
For example, if you work on state or local government contracts, you may need to have E&O insurance. Arizona healthcare workers may also need malpractice insurance, a type of professional liability coverage, to secure a job.
Many Arizona business owners get professional liability insurance, even when it’s not required, for the following reasons:
Financial protection
Small businesses in Arizona may be better financially protected if they make a professional mistake or face accusations of negligence.
Work contracts
Your clients may ask for proof of professional liability coverage in the form of a certificate of insurance before agreeing to work with you. With this coverage, you may get larger, more high-value contracts.
Licenses and permits
Depending on your industry and where you work, you may need to have professional liability insurance to obtain or renew certain business certifications or licenses.
For example, while the state does not require notary E&O insurance, Arizona notaries are required to purchase a $5,000 surety bond, and the National Notary Association recommends adding errors and omissions insurance.1
What types of businesses might need Professional Liability in Arizona?
Professional liability insurance provides common coverage for professional services,
including consulting, accounting and engineering.
Businesses in many different industries can benefit from this Arizona business insurance.
Nearly all professionals risk making mistakes that could cause financial harm to a client or potentially face an accusation of negligence or wrongdoing. With professional liability insurance, you could get help to resolve these issues and protect your reputation.
For instance, an engineer in Scottsdale wracks up legal expenses while contesting a safety inspection violation. In that case, their professional liability insurance could help cover the legal fees needed to defend themselves and their business.
Say a Tuscon architect’s client alleges they made a mistake in their designs that led to the collapse of a stairwell and sues for causing injuries. Professional liability insurance could help cover defense costs.
How much is Professional Liability insurance in Arizona?
Costs vary for Arizona professional liability insurance based on several factors, including:
- The industry you are in
- Where you do business
- The number of people you employ
- Your work experience
- Your history of past insurance claims
- How high you set your policy limits
NEXT makes it simple to get affordable Arizona professional liability or E&O insurance online in around 10 minutes. Our monthly premiums cost $45 or less for 52% of our U.S. customers for this type of business insurance**
Learn more about professional liability insurance costs.
How NEXT Insurance helps Arizona businesses
NEXT provides professional liability insurance policies for Arizona 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.
