Professional Liability insurance can help professionals, independent contractors, and third-party agencies with some of the following things.
Negligence: Which is defined as failure to use reasonable care, resulting in damage or injury to another person or property.
Misrepresentation: Which is often construed as making an untrue or misleading statement of fact during the course of professional negotiations. Especially if that statement then induces that other party to enter into a contract. In many of these cases the misled party or company might choose to rescind the contract or seek payment for damages and financial losses related to the misleading information.
Inaccurate Advice: This can occur when inaccuracies in information lead a client or customer to make the wrong decision. It is more common with consultancies, but can also be seen as an umbrella for other instances where negligence and misrepresentation don’t clearly apply.
Even if your errors are unintentional the affected customer or client can still potentially sue your business to recoup losses. If you don’t have professional liability coverage, you most likely will have to pay expensive legal defense costs directly out of pocket or as part of a settlement.