Risks of Insurance. Part of the series: Overview Of Insurance. Getting insurance still has its fair share of risks associated with such a decision. Learn about the risks of insurance with help from an insurance professional in this free video clip.
(October 15, 2015) Governor Edmund G. Brown Jr. has taken action on two important workers’ compensation bills, signing one bill that reduces medical disputes and increase timeliness of appropriate medical care and vetoing another that would have required employers to compensate certain pre-existing injuries or conditions that were unrelated to an industrial injury. These bills are the subject of today’s Capitol Report video.
Designed to cover professional practitioners against claims of negligence made by clients or patients, professional liability insurance goes by many names. When used in the medical profession, it is commonly called medical malpractice coverage. Notaries public also require this security, but they refer to it as errors and omissions insurance. Real estate brokers, management consultants, and even website developers are all eligible for protection.
What's It For?
Insurance is used to protect people in case something unfortunate happens. Auto policies protect them in the event of an accident; medical policies protect them from unexpected illnesses; commercial policies protect them from a number of mishaps. If there is a fire, theft, or an accident on the job, the commercial variety will cover it.
Why You Need It
Few companies are fortunate enough to survive for a protracted period of time without getting sued by a client, customer, or employee. Liability coverage from an insurance company is the only shield most businesses have against litigious attorneys. This goes double when an employer competes in a risky industry like construction. Why?
A construction site is arguably the most dangerous working environment on earth. Not because people are careless, but because making something, anything, is risky. Workers fall down stairs; they trip on cords; they cut themselves. Builders must assume this risk and purchase the right amount of coverage from their insurance company to protect them from financial ruin. But that's not all.
These policies not only shield the employer, but they also safeguard his workers. If an electrician falls off a ladder or a carpenter cuts himself, a liability policy will pay his medical bills. Commercial coverage will also cover most attorney fees and court costs if someone files a suit against you.
How Much Do You Need?
As you might expect, the size of the policy often depends on the size of the business. Most actuaries recommend at least one million dollars of professional liability coverage for small businesses. Large businesses and corporations obviously need a lot more and often carry huge policies. Because lawsuits are quite common in the medical profession, malpractice insurance is the most common form of liability coverage.
Most doctors have several million dollars of malpractice coverage at all times. When they work in a large practice, that figure might be five or even ten times as high. Lawyers and accountants must also carry liability because of the high rate of litigation in their fields. But what about everybody else?
Any business that can be held financially responsible for failing to complete a project on time may need to purchase a professional liability policy from their insurance company. This includes general contractors, architects, builders, and many, many more. These policies also cover personal injury, breach of warranty, intellectual property, and security. In short, any company that has more than one employee should have liability coverage.
There are 4 million dog bites each year and 60% of the victims are children. Dr. Leslie Sinclair of the Humane Society of the U.S. says children often don't respect a dog's boundaries—they expect every dog to be friendly, and although most are some aren't. Dr. Tillman Jolly, an emergency room physician says he sees injuries every year because children often do things that they don't realize are annoying to dogs. The Insurance Information Institute cautions that parents should teach their children not to approach an unknown dog. Allow dogs to sniff you before petting them, never disturb a dog that's eating, sleeping or caring for puppies, don't try to run from a dog, and if one is chasing you, stand like a tree or look like a log. Insurance companies paid out $3.5 billion in claims in 2006 for dog bite claims.