What Does Professional Liability Insurance Cover in New Jersey?

Running a business is a risky operation no matter how careful you are. Whenever you mix the public and professional advice or services, unfortunately there’s always the potential to do unintended harm. Working with a New Jersey independent insurance agent is the best way to get your business insurance set up with all the protection it needs, which means a professional liability insurance policy. But first, here’s a closer look at this crucial coverage.

What Is Professional Liability Insurance?

While it depends a lot on the specific profession you’re in, generally speaking professional liability insurance is an agreement between a business and an insurance company in which the insurer agrees to cover financial losses relating to legal claims against the business. Coverage aims to protect you from professional mistakes. Business owners in New Jersey purchase coverage for protection against costly legal claims and lawsuits filed by clients/customers.

What Does Professional Liability Insurance Cover in New Jersey?

Professional liability insurance coverage in New Jersey is essentially the same as everywhere else. Depending on the type of services offered by your business, your specific risks will vary from other business owners. The type of coverage you need will depend on the type of potential harm to the public presented by your business and how great of a risk it is.

The two main coverage types of professional liability insurance available in New Jersey include:

• Malpractice insurance: This coverage is designed for medical practitioners like doctors and nurses, psychiatrists, and OB/GYNs, and provides protection for lawsuits relating to errors/mistakes or negligence. Coverage is crucial for basically all workers in the medical field due to the frequency of malpractice suits and the extremely costly nature of these claims.
• Errors & omissions liability insurance: Nicknamed “E&O insurance,” this coverage is designed for other professionals outside the medical field who offer advice or other services like consultants, lawyers, architects, and even insurance agents. Coverage provides protection against lawsuits relating to incorrect information or bad advice that causes unintentional harm to customers/clients.

While nearly every business presents risks like slippery floors and unsteady shelves to their customers, only certain professions carry the risk of harming their clients in ways not relating to bodily injury or property damage. Working together with a New Jersey independent insurance agent is the best way to equip your business with the right professional liability coverage to protect against lawsuits relating to its unique risks.

What Does Professional Liability Insurance Not Cover in New Jersey?

While professional liability insurance provides coverage for many potential sources of harm by businesses in New Jersey, it doesn’t cover everything. While the exclusions vary by policy, there are a handful of commonly non-covered perils under professional liability policies in New Jersey, including:

• Intentional harm
• Regulatory/statutory penalties
• Employee dishonesty
• Bodily injury
• Property damage

Bodily injury and property damage are covered under commercial general liability (CGL) insurance, so they’re not included under professional liability. If you’re concerned that your business is lacking in any area of professional liability protection, a New Jersey independent insurance agent can help you get set up with all the coverage your business needs.

What Are the Benefits of Professional Liability Insurance in New Jersey?

Businesses absolutely need liability protection, and depending on your profession, the type of coverage needed may increase to the point of needing more than one type of policy. There are a couple of major benefits to professional liability coverage policies offered in New Jersey, including:

• Protection against professional errors/negligence: As a professional offering a service to the public, there’s always potential to do unintentional harm. While professional liability coverage is obviously needed by doctors and lawyers, it’s also needed by plenty of other professionals including hairdressers. Botching a dye job before a bride’s wedding and turning her hair bright pink for the big day, for example, would be a professional error that could result in an ugly lawsuit.
• Protection against liabilities not covered under CGL insurance: Commercial general liability insurance is designed to protect businesses from legal costs relating to accidental/unintentional bodily injury/harm or property damage to their customers or clients. Professional liability extends coverage to other areas of unintentional harm, including giving bad advice or performing a service that results in other forms of injury/upset or damage.

Having adequate liability coverage for your business is crucial. Liability claims can cost several hundred thousand dollars and have the potential to bankrupt a business without the proper insurance. Because of the risks involved in operations, business owners need professional liability coverage to protect both themselves and the public. Causing unintentional harm is tragic enough to begin with, but with the right coverage, it doesn’t have to mean financial ruin.

How Much Does Professional Liability Insurance Cost in New Jersey?

It really depends on the size of your specific businesses, what services you offer, and the potential risk it has of doing professional harm to the public. Lower-end policies in New Jersey might cost $1,200 annually for professionals like consultants, while higher-end policies that pack in much more necessary protection for professionals like anesthesiologists might easily cost $10,000 or even more per year. Your New Jersey agent can fill in the blanks.

Why Work with a New Jersey Independent Insurance Agent?

In order to get the protection you need and deserve, you’ll want to work with a trusted expert. And who could be better for the job than a local agent who shares your area code? Independent insurance agents act as your own personal insurance shoppers, offering you tons more options than one-policy companies. With just one call, they’ll hook you up with multiple quotes.

New Jersey independent insurance agents are armed with knowledge on what coverage is needed in your area, and they’ll get you set up with just enough of it — not too little, not too much. They’ll handle all the heavy lifting so you can rest assured you’ll be set up with the right coverage at the right price.

They’re not just there at the beginning either. If disaster strikes, your New Jersey agent will be there to help walk you through the claims process and make sure you’re getting the benefits you're entitled to. Now that’s thinking ahead.