DannyK said:
I am working as a subcontract lead auditor in Canada and have been asked by a registrar to obtain professional liability insurance.
I have asked a few insurance brokers and they indicated that the cost would be a minimum of $2500.
Does anyone have any experience with professional liability insurance and what was the approximate cost?
Thanks for your help! Danny
That seems pretty high - but maybe not, since physicians and surgeons working in the USA are paying tens of thousands of dollars for liability insurance and upwards of $100,000 for specialties like cardiology and neurosurgery. In the late 1980's, I had an errors and omissions policy of my own in addition to my company's coverage
(we were investment bankers specializing in targeting and shepherding private companies through the IPO process.) As I recall, my annual premiums were about 1/10 of 1% of the face value of the policy. They did NOT cover against me stealing intellectual property from a client.
Ask this registrar who they currently buy their own insurance from and what they pay and for what total coverage
($100,000 or $1,000,000?) Obviously, you want to have an insurance carrier that is acceptable to them. Especially ask to see and keep a copy of one of their policies and the fine print in it so that you can shop for a comparable policy.
I'm presuming they are only looking for an errors and omissions policy, as opposed to full liability
[which might cover stuff like you stealing secrets and peddling them to a client's competitor or using information to enrich yourself in the stockmarket.]
One website I looked at described coverage this way
(emphasis in blue is mine) Note the premium should be ameliorated since you are theoretically supervised by the Registrar hiring you who should be backstopping your work product before client's damages reach catastrophic proportions:
Professional Liability Insurance (Errors and Omissions Insurance) is your most critical coverage. Professional liability coverage protects you against loss from a claim of alleged negligent acts, errors or omissions in the performance of your professional services. This might include loss of client data, software or system failure, claims of non-performance, or negligent oversell. Be sure your professional liability policy includes the following key features:
- Coverage includes legal defense cost. Professional liability insurance will pay for any resulting judgments against you including court costs up to the coverage limits on your policy.
- Coverage extends to both W2 employees and 1099 subcontractors. Coverage should protect your company from claims resulting from the work done by 1099 subcontractors on your behalf. (It is important to note that 1099 personnel need their own errors and omissions insurance because your policy does not defend them if they are sued separately or in addition to you.)