How to Avoid Professional Liability Risks
A professional liability claim, also known as errors and omissions, can be filed by a customer or client of a company that errs. An error can include mistakes in written documentation or performance, failing to inform the client of a change in plans and any variety of miscommunications that result in an unsatisfied customer. Any lawsuit that arises, whether grounded or frivolous, can cost tens or even hundreds of thousands of dollars, which is enough to threaten the financial stability of many businesses. To minimize your business’ risk (which can reduce your professional liability insurance premium), implement the following tips:
Maintain Your Paper Trail
All documents should be reviewed by at least two associates to ensure that everything is correct before signing. It’s recommended that you use standardized forms, as dictated by industry professional associations, rather than your own versions. This includes agreements, contracts, disclosure forms etc. In case you need to build a defense, keep records of all documents related to customer transactions, along with emails and any notes taken during verbal communication.
Stick With What You Know
Customers come to you for your expertise on a subject, so you should not offer any advice on a different subject that you’re unfamiliar with. Customers may run into problems if they take poor advice, which your business can then be held liable for. But just because you know something, doesn’t mean it’ll be the same forever. Industries are constantly evolving, if for no other reason than the development and integration of new technology. Read up on industry news and take continuing education courses so you can remain at the top of your game, along with running your business within the confines of laws and regulations.
Hire the Best
To offer the best services, you need a highly qualified staff that’s fully licensed and insured when required. Additionally, you may want to hire a lawyer to evaluate your business’ risks from a legal perspective and offer solutions for how you can better manage those risks.