Professional liability insurance in California

Any business that provides a professional service or expert advice should carry professional liability coverage, as a client could sue if your service or advice causes accidental harm. Even a frivolous lawsuit can be expensive between accounting for attorney’s fees, court costs, or a settlement.

Industries often at risk for professional liability claims include:

California law does not require small business owners to have a professional liability insurance policy. However, you might need this coverage to sign a contract or to get a license in your field.

Professional liability insurance covers your legal defense costs if you’re sued over a mistake in your professional work, and it's affordable for low-risk businesses.

Even if you’ve done nothing wrong, a legal battle can be expensive. In addition to your attorney’s hourly rate, you’ll likely be charged for administrative costs such as copying, filing, and travel expenses. You may also have to pay for expert witnesses to testify on your behalf, a court-ordered legal judgment, or a settlement to avoid trial.

Professional liability insurance covers all of the above, up to the coverage limits of your policy. The policy limits you choose should take into account how expensive it can be to fight a professional liability lawsuit. You also need to determine the amount of coverage required to obtain a contract or work in a certain field.

For example, healthcare professionals in California will likely need liability limits of $1 million per claim, and $3 million in aggregate per year.

A professional liability policy covers a wide range of lawsuits, but it will not cover intentional harm you cause to others. Most insurance companies exclude:

• The illegal violation of any law, regulation, or statute
• Any services you provide under the name of another entity, such as a subsidiary business or organization not listed on your policy
• Defamation, such as libel and slander
• Discrimination

General liability insurance does not include professional liability coverage, though both policies cover claims from customers.

In short, general liability provides financial protection against accidents involving people outside your business, while professional liability covers claims of negligence, such as failure to complete a project on time.

General liability covers the most common types of customer and client claims. That includes customer injuries, customer property damage, and advertising injuries. If a customer falls and suffers an injury at your office, it would be covered by your general liability policy, which would include your legal defense costs.

If someone sues you over unsatisfactory work, it would be covered by your professional liability coverage. Read more about general liability vs. professional liability insurance.

Complete Insureon’s easy online application today to compare insurance quotes from top-rated U.S. providers. Our California licensed insurance agents can help answer any questions and find coverage that matches your business needs. Once you find the right policies, you can begin coverage and get your certificate of insurance in less than 24 hours.