How to choose a Professional Liability Insurance in the United States [2023]

If you plan to establish yourself commercially in the United States by acquisition or creation, there is one dimension that should not be overlooked: insurance. The notion of responsibility (liability) is extremely strong in the USA, hence the power of lawyers and the exorbitant defense costs. Insurance is therefore essential to avoid unpleasant financial surprises in the event of a problem.

What is professional insurance in the United States ?

Each risk to be covered in the United States must be insured locally via an insurance contract issued by an insurer residing in the USA. But beware, an American insurer is not necessarily able to cover all the United States, the obligations vary from one State to another, the same goes for insurance premiums or taxes, and you You won’t have the same constraints with a subsidiary located in New York, San Francisco, Seattle or Miami.

As a business leader you have a responsibility to customers and employees. If a claim is made against your business and you are uninsured, you are personally liable for all damages and legal costs. Professional insurance is not compulsory in theory, but it is nevertheless required by law in certain professions.

Shopkeepers have already found themselves in catastrophic situations… like this French hairdresser, ruined following an accident in front of his salon. A customer fell on the sidewalk leaving the store, filed a complaint and demanded hundreds of thousands of dollars in damages because there was no signage on the step at the exit.

What are the professional insurances on the market?

There are multiple commercial or professional insurances offered by many insurers. They are generally presented either according to the sector of activity of the companies (consulting, agriculture, architecture, health, etc.), because each industry has its own risks, or by services (commercial insurance, professional liability, employment practice etc.). From the simplest, civil liability for operations, to the most specific, civil liability for managers, employers… the range of products is quite vast!

Depending on the sector of activity, the profession and the nature of the risk against which you wish or must cover yourself, the contract is therefore different. It is recommended to go through an insurance professional to make the point and the right choice at the best price.

We obviously cannot describe in this article all the insurance in force on the market, but here are some examples.

Depending on the sector of activity 

– For Architects and Engineers
Building professionals face construction-related risks and therefore need to be covered in relation to their professional liability and the management of project-specific engineering risks.

– For consulting activities
In the field of consulting or property management, professionals can be declared negligent in the course of their activity. “Errors and Omissions” insurance, for example, covers the insured for this type of problem. It is an essential guarantee to have (and sometimes obligatory) so much the jurisprudence is important in this field.

Depending on the services 

– Civil liability insurance (General Liability)
If you have premises or manufacture products, your civil liability may be engaged from the moment a product causes damage to a consumer or a customer is injured while coming to your premises. local. Civil Liability insurance covers bodily injury or physical damage on the premises, but also that which may be caused by the products manufactured or marketed.

– Professional Liability Insurance
Also known as Errors and Omissions, this is coverage that protects against claims of negligence or failure to perform professional duties in the conduct of business.

– Employer’s Practice Liability.
In the absence of protection from the public authorities, employees assisted by one or more lawyers can very easily and quickly turn against their employers. Employment practices (or labor relations) liability insurance provides protection against claims such as discrimination, wrongful termination of contract and harassment.

– Workers’ Compensation Insurance
Protects against costs associated with work-related illness or injury. If an employee falls ill or is the victim of an accident and is unable to work, the insurance covers all medical expenses and replaces approximately two-thirds of the loss of wages resulting from sick leave. . In some activities, penalties and fines may be applied to employers who do not have this insurance.

– Management Liability Insurance
Helps protect public, private and not-for-profit companies against a wide range of issues with boards of directors.

– Directors and Officers Liability (D&O)
Protection for directors and employees against claims from competitors, shareholders and regulators.

Insurance is changing too. Globalization and new technologies are giving rise to new fonts…

 – Mergers and acquisitions insurance Mergers and
acquisitions (M&A) are a risk for the company which can be protected by specific insurance.

– Cyber ​​insurance
As part of a global business, the company today depends on continuous and normally secure data flows. But in the event of a computer attack, the business can be compromised. Insurance helps mitigate cyber risks.

– Reputation risk insurance
A company’s reputation is important for the proper functioning of its business. Insurance helps respond to attacks and mitigate reputational damage.

Most insurers also offer “packages” including several professional insurances such as a “Business Owner’s Policy (BOP)”, which combines two covers in a single policy: material damage and civil liability insurance.

Contact an insurance professional

From property insurance to the protection of executives, including accidents at work, emerging risks or reputation, everything can ultimately be insured within the framework of a professional activity.

But whatever the need, the field of insurance remains a very complex subject. It is essential to contact a specialist who can advise you on the most appropriate cover for your environment and at the best rates. It is also best to call on a French- speaking specialist who can explain to you in your language all the products available to you.