Insurance Agency for Sale in CA? – [Legal & Professional Liability?]
Before you begin your search for an Insurance Agency for Sale in California, examine
the legal and professional stance of the business purchase beforehand.
This article will cover the components of a professional insurance policy, and the
business liability responsibilities, as a new owner.
Take this information, and apply it to securing your new business purchase or
future investment. So, let’s begin with what a professional liability policy is,
and how it can protect your business investment and reputation.
Insurance Agency Professionals – Policy Exclusions?
Many professional liability policies on the market today,
will contain some form of exclusions on the policy document page.
They are commonly found on general liability forms.
These liability forms, are assumed or obligated, and fall under a worker’s compensation law.
This law of coverage, will be dissected in greater detail,
Insurance Policy – Exclusion List:
Keep in mind that this type of insurance coverage
does not cover the following acts:
- Criminal acts
- Dishonesty acts
Policy Exclusion Activities
These exclusion acts, are self-explanatory and obvious for the most part.
If you, or your business, is committing illegal activities,
there is no insurance on the marketplace that will honor coverage for that type of loss or risk.
The why part comes from utilizing the ethical approach in the actual business practice of a professional.
Being unethical in practice, is counter-intuitive to the process
of coverage and protection, of professional insurance.
If you are interested in learning more about ethics in the insurance industry or
ethical manner and insurance professionals, please go to our resource page,
where this topic is covered in great depth.
These insurance contracts are formulated and
available for the following professionals:
- Insurance agents
- Financial planners
- Real estate agents
General Insurance Agency Types
These type of insurance policies, are valuable in the process
of anyone practicing a professional industry or service.
This is because, at any time, a professional or business owner of a professional
service organization, can find themselves
on the other end of the legal courtroom, as a defendant.
Professional Liability and the Legal System
Who wants to be named in a lawsuit as a professional?
The answer is probably, no one, and rightfully so.
This is because, a lawsuit not only exposes
your reputation to the general public,
where many professionals have built a
reputable practice through, but other consequences.
These other consequences take the form in
legal ramifications and legal costs to defend in such a lawsuit.
The legal costs alone to defend yourself, can be
outrageous, regardless of fault or admission of fault.
Positive Lining of Professional Insurance?
On a positive note, many lawsuits never make it to the
actual courtroom, which is good news.
This is because, you know the legal case will not be
dragged out for months or years to come.
There are so many check points, fact checking and
the lack of motivation to move quickly in government.
There is reason for this slow progression,
which is also covered in our governmental or non-profit insurance series.
The Cost of Legal Defense
However, regardless of fault, as explained above, the cost to defend yourself
or company can be overwhelming and
devastating to a person or professional organization.
While many of these lawsuits are unsuccessful,
it’s the legal costs that you need to look at in close detail.
Legal costs can include such things as:
- Legal defense
- Potential settlement awards
These alone, are enough to decide on why
the need for an extensive professional liability coverage policy.
Additional Reasons of Insurance
There are additional reasons to why you should strongly
consider purchasing professional liability insurance,
if you practice within a professional industry of service or practice.
One good reason is the trending growth and frequency of malpractice suits.
In the medical field, professional liability
coverage is often regarded to a malpractice insurance policy.
However, in other areas, there are labels or of this
coverage as an errors and omission insurance.
This is particularly true when there is no
insurance protection for the bodily injury portion.
General Professional Liability Coverage
However, all professional liability is a form of malpractice insurance,
that falls under your general insurance policy.
With the growing frequency of malpractice suits for example,
there also becomes a growing number of sympathizers within the court systems.
Now, professional people such as doctors, are being
held to more accountability for their mistakes than ever before.
This can only gain in momentum as time passes.
This is because which each passing year, the sums of payout
for these types of legal cases are being higher and higher.
These awards being granted to plaintiffs in suits of the medical
practice, are one example for the need for professional liability insurance.
This is one area of disclosure that should be incorporated
in the study of each professional occupation.
To show how to purchase a proper professional insurance package, with adequate limits.
In recent trends, 2017-2018, the increase of professional liability
insurance policies has increased and maintained its rise,
as with the increase of medical or malpractice lawsuits.
What this means is, the more legal cases against professionals in
all industries, not just the medical profession, will also push the need,
and requirement for professional insurance a whole.
Difference in Occupation and Insurance Coverage
Since there are many different types of policy occupations that a
professional insurance policy will cover, it is a good starting point to examine.
The examination starts with the distinct differences between an error and
omissions policy to other liability insurance contracts.
This policy comparison, will take current insurance programs on the market,
and compare them to the professional insurance program in discussion, errors and omissions.
There exist three differences to this comparison, that will follow for key policy identification.
This is because, one negligent act on the part of
professional for example, may not always involve more than one party.
No limit to claim reporting exist, instead a
limit of liability per claim, emphasis on per claim.
Policy and Occupation Reputation
The effects of a claim against a professional person,
such as a physician for example, can cause an adverse effect on the role they performed.
This means, the reputation of the physician may
come into question, if a large case against this individual goes public.
However, since this type of policy is helping to
prevent such bad press, offer certain policy coverage.
For example, the policy can allow you the business owner or professional,
to carry any action to the courts.
However, since an out of court settlement can have certain implications,
that can affect the reputation, it is important to finding methods to
curb this type of exposure for possible loss, is of great importance.
This is because, the clients of the professional, may have had a bad client case,
where the business’ reputation came to light.
The consequence of such a negative media piece, or public exposure,
can create business disruption in sales, and potential sales.
Settlement of the Courts
Settling outside of court, is sometimes viewed by the public audience,
or individual that was affected, as a negative business experience.
Beyond the obviously, the destruction of a business’ online lead channel,
is one area that needs to be examined in closer detail.
There are general policy exclusions available,
that are evident for each type of insurance:
- or plan
Policy Exclusion Plan?
One such policy exclusion for an E&O insurance contract, is,
the exclusion for payment on an agreement.
This is because, it offers a guaranteed to any results of the treatment.
For example, there are legal suits, that arise from patients or clients service dissatisfaction.
This is when the services performed and rendered from the
professional, are not acceptable from the paying party.
In this case, the paying party would be you, the professional,
or name insured listed on this type of specialize insurance package.
There are many professionals, in many industry types and classifications,
that agree that having an errors and omissions insurance policy is, a definite business necessity.
This is when a large or humongous risk is at stake.
This risk is in jeopardy due to the stake of not investing in such a coverage.
Some professionals, have adopted the opinion to not
have some sort of malpractice insurance coverage.
Insurance Agency – Professional Mindset
The reasoning behind this risky business decision, comes from thinking that carrying
large amounts of insurance, especially from a professional standpoint, will only attract future claims.
Some professionals, believe that having this type of insurance coverage, will only encourage the filling of claims.
The reasoning behind this statement is, that patients or clients,
or their legal representation, may think that having professional liability insurance,
is a gateway for collecting big dollars.
The thinking is, professionals with deep pockets, have this type of insurance coverage,
and that the public is aware of this tempting trade-off.
Even though this type of insurance coverage can protect these professionals against
possible claims, they still elect not
to have some sort of malpractice insurance.
This is even against the prevention of future claims against them,
the professional, and their business practice.
This is because, like the theory stated above the deep pocket theory
overrides ethical judgment and logic in decision making.
You have insurance coverage, because you want to protect your monies,
and future business investment.
This is somewhat true, but only explains a limited perspective
of the true definition and reasoning for professional insurance.
Professional Insurance Theory?
The theory of not sending messages of deep pockets, is a practice of business deterrence.
It is thinking that the other party would not follow up with
a lawsuit, thinking there is no insurance coverage, so no money to go after.
However, this theory is a risky one, can backfire and many have faced its fiery outcome.
Total loss in some cases, because legal cases as you know, can become very expensive, very fast.
So, this is a risky proposition to take for any professional.
This is because you need to ensure your covered on a personal basis.
Therefore, even if you are a professional,
but work in a corporate setting,
you are still held personally responsible.
Policy Specialization and Concentration
This definition of policy specialization and concentration,
refers to a particular industry.
This type of insurance coverage, also refers to the protection
of products that you may represent in your practice.
There are certain industries, that may
be written under a common error and omissions policy.
This is where the specialty lines become visible.
Concluding Coverage – Specialty Insurance Agency Items
These specialty items are exposed many variations.
These policy variations for specialty lines are:
- Legal Insurance
- Ocean marine
There are in some cases, a professional organization association.
This organization may offer its own specialty coverage,
like malpractice insurance as an example.
There are other affiliations or associations,
that do offer this type of buy on coverage, like the American Bar Association.
The American Bar Association offers attorneys such an insurance program purchase.