What Is a Miscellaneous Insurance Policy?

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Miscellaneous insurance sounds boring, doesn’t it? Well, it is. Until your fledgling business gets smacked with a $1.2 million lawsuit. Youch.

When that happens, your Miscellaneous insurance policy shapeshifts from a boring legal mumbo-jumbo document into a magical rainbow-shooting unicorn of a business saver.

Look, mistakes happen. Whether we admit it or not, we all make them.

But what happens when you make a big mistake? Like, lawsuit-big.

Maybe you’re an accountant who missed a few numbers and all of the sudden your client is out millions? Maybe your agency promised big results but failed to deliver? Clients can file lawsuits against your business for mistakes like these, even when you don’t deserve it.

Without the right insurance, you’ll be responsible for covering attorney, litigation and even settlement fees out of pocket. On the other hand, if you have a good Miscellaneous insurance policy, you won’t have to shoulder the crushing weight of that financial burden.

Whether you’re a business owner or business professional I think you’ll agree with me when I say, peace of mind is kind of a big deal. And generally, that’s what insurance is all about. Now, if you’re wondering exactly what Miscellaneous Professional Liability insurance really is, or are trying to figure out whether or not you need it, keep reading and you’ll find your answer.

Who Needs Miscellaneous Insurance?

After all of this time nurturing your dream business or career, you finally turned it into a full-time, money making opportunity. That’s an accomplishment you deserve some real credit for. So kudos. But once you’ve gotten a taste for running the show and making good money, it’s hard to imagine anything else, ever again. Protecting your business is important. It’s your livelihood after all, and your pride and joy. If you’re trying to decide whether a Miscellaneous insurance policy is necessary, ask yourself these questions:

  • Do I offer paid services or advice?
  • Do I hire contractors who act on my behalf?
  • Have I signed a confidentiality or business agreement with my client?

If you answered “yes” to any of the above questions, it’s probably in your best interest to consider a Miscellaneous insurance policy. A doctor wouldn’t perform open heart surgery on a patient without Malpractice insurance, would they? Nope. That would be crazy. So why would you conduct business without your own legal protection? Here’s a few examples of professionals that should definitely consider a Miscellaneous insurance policy:

  • Outsourced Payroll Processors
  • Graphic Design Artists
  • Tutors
  • Public Relations Specialists
  • Property Managers
  • Interior Designers
  • Architects
  • Small business owners (more on that later)

The list could go on. If you’re a consultant, for example, or a travel agent or an event planner, there’s going to be some sort of risk or liability involved. Your customers can sue you for errors and omissions. Things get even scarier for professionals who deal with finances and confidentiality: mortgage lenders, accountants, insurance agents, etc. Really, this type of insurance is necessary for almost any professional contractor. Any error or negligent act made by you or someone representing you can amass an avalanche of unwanted consequences. Accidents happen.

For Example: An engaged couple scours the internet for a local wedding photographer. After reading countless reviews and clicking through portfolios, they settle on a photographer whose artistic eye stands out above the rest. It’s a bit of an investment, but they schedule a consultation and after a great conversation, decide to put down a deposit.

The photographer is amazing, deftly guiding the couple through the most natural poses, always present for the big moments throughout the day. But the next day, to the photographers dismay, the SIM card fell prey to her toddling two-year-old (who managed to take a fatal swipe at the card as it lay helpless on the table). The couple’s most treasured moments... Gone forever.

Mistakes happen. Will the couple sue the photographer? I mean, they have no professional photos of their wedding. There’s no way to fix the problem. The photographer, on the other hand, is scared and worried. She didn’t purchase the right Miscellaneous Professional Liability insurance, as it seemed like an unnecessary expense. Who would’ve thought something like this would happen? But now she could lose it all; her finances, livelihood, reputation. And they lived happily ever after, when they moved on...

...to the next section! (Just in case you’re still a little confused about what Miscellaneous Liability insurance is. We’ve got you covered below.)

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What Is Miscellaneous Professional Liability Insurance

Miscellaneous Professional Liability insurance. That’s a mouthful. More importantly, it’s a term business owners and consultants should know and understand. Because taking the necessary measures to protect you and your life’s work is muy importante. So what mistakes does this type of insurance cover? Lets dig into the definition and its specifics.

The definition of miscellaneous professional liability is:

Insurance coverage that helps financially protect an individual or company that performs a professional duty and has an allegation brought against them.

Allegations can be brought forth from the legal nether for a number of reasons, but here’s the most common reasons:

  • Not performing an agreed upon task
  • Failing to meet deadlines
  • Overlooking important details
  • Not communicating effectively
  • Forgetting to do something

Keep in mind, Professional Liability insurance doesn’t cover intentional wrongdoings such as:

  • Racial discrimination
  • Illegal activity
  • Intentional errors

A minor slip up (from the first list) here and there is normal, and for the most part forgiven and forgotten. But if your error harms your client in a big way, costs them business and/or ruins their reputation, they’re probably going to find someone to blame, and they’re probably going to make sure that person is you.

Having a miscellaneous insurance policy could mean the difference between bouncing back from a lawsuit and going bankrupt. In the unfortunate event you or your company are faced with a lawsuit, you’ll have the backing of your insurance policy to help you.

Other Things To Note: We’ve talked about what happens if you make an error, but what if someone maliciously goes after you or your business for no reason? It really does happen. The beauty of our judicial system is that anyone and everyone can pursue legal action for maltreatment. But there’s a flip side. In our sue-happy society, people often get sued for things they didn’t even do. We’ve all seen those outrageous news stories, the ones where a customer sued a business for something that was entirely their fault. (cough McDonald's-hot-coffee-lady cough)

No one’s immune to a lawsuit. Whether you made an accidental mistake, or someone is misusing a situation to try and make money off of you, it’s wise to protect yourself. Based on the amount of coverage you select, miscellaneous professional liability insurance can pay for some or all of your legal costs, as well as any settlement fees.

So which businesses can benefit from this type of coverage? We’ll get into that soon.

What Businesses Need Miscellaneous Professional Liability Insurance?

Whether you have 200 employees or 2, the added protection a professional liability insurance plan gives you can be a Godsend.

Think about how many stupid mistakes you made as a new employee. Who doesn’t? There’s always a learning curve. Your new employees are in the same boat you were as a young employee. But now, you’re the Captain of the ship, and you know what the Captain does when the ship goes down.

As a business owner, you have to be able to eliminate pitfalls before people start falling into them, because in the end, you’re responsible for the employees’ mistakes.

For Example: You own an optometry practice and employ three workers. Each performs various tasks such as selling glasses, operating pre-testing equipment, and teaching new contact lens wearers how to insert and remove contact lenses.

Your new technician selects the wrong type of lenses or treatments for a young child’s glasses, another shares confidential information because they got two patients mixed up, and the person responsible for teaching a patient how to insert contacts accidentally scratches the patient’s cornea thanks to shoddy instructions. Mistakes happen.

But in this case, the mistakes make for a multi-million dollar mess of a lawsuit (or two). And you’re the Captain.

And speaking of ships — the list of businesses that could benefit from a miscellaneous liability insurance policy is more or less endless, but to name a few:

  • Bridal Boutiques
  • Tattoo Parlors
  • IT Firms
  • Marketing Firms
  • Real Estate Agencies

Again, there are many more, but you get the idea.

Now that you know what miscellaneous insurance is, who it’s for, and which businesses need it, you can make the best decision for you. With a good miscellaneous insurance policy, you can carry out your business without worrying about getting sued into a smoldering hole in the ground. Losing your businesses or career would be devastating, but then again, it is yet another expense. And who likes those? A lot of businesses survive just fine without one.

What do you think — is it worth getting for you personally?

Are you ready to get down to business?

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