As we begin 2025, businesses must evaluate their professional liability insurance coverage to ensure adequate protection against the latest risks. This comprehensive checklist can help you review and update your coverage for the new year, potentially saving you from costly gaps in security.
Review Your Current Coverage
The first step is thoroughly examining your existing professional liability policy. Consider these essential questions:
Coverage Features
Have your revenue or service offerings changed in the past year? If your business has grown or evolved, your current coverage features may need adjustment. Review both your per-claim and aggregate limits to ensure they align with your current risk exposure and client contract requirements as well as enhancements such as first dollar defense or defense outside limits.
Policy Exclusions
Take time to understand what your policy doesn’t cover. Common exclusions might include cyber incidents, intentional wrongdoing, or specific services you’ve recently added to your offerings. If you’ve expanded your services, ensure these new activities are covered under your current policy.
Assess Your Business Changes
Businesses evolve, and your insurance needs to keep pace. Consider these key areas:
Service Offerings
Did you introduce new professional services last year? Are you planning to launch new ones in 2025? Each new service could bring additional liability exposure requiring coverage adjustments. For example, if you have a law firm that traditionally focused on real estate law but recently expanded into intellectual property litigation, you might need enhanced coverage or an alternative policy specific to IP practice exposure.
Client Contracts
Review your client contracts from the past year. Do any clients require higher insurance limits? Are there new contractual obligations regarding professional liability coverage? Ensure your policy meets all contractual requirements for the coming year.
Evaluate Industry Trends
Stay ahead of emerging risks in your industry. The professional landscape is constantly changing, and your insurance should reflect these changes:
Remote Work Considerations
If your business maintains remote or hybrid operations, verify that your professional liability policy covers work performed from home offices or remote locations. Some policies might have location-specific restrictions.
Technology Integration
As businesses increasingly rely on technology, ensure your policy addresses risks associated with digital service delivery, online consultations, or software-based solutions you provide to clients.
Update Risk Management Procedures
Strong risk management works hand-in-hand with your insurance coverage:
Documentation Practices
Implement or update systems to maintain detailed records of client interactions, project milestones, and service delivery. Accurate documentation can be crucial in defending against claims.
Staff Training
Schedule regular training sessions on risk management procedures and updates to your professional liability coverage. Ensure all team members understand their roles in maintaining compliance and reducing risk.
Professional liability insurance isn’t just about meeting minimum requirements – it’s about protecting your business’s viability and future. Regular reviews and updates ensure you’re adequately protected against traditional and emerging risks.
At Callahan Risk, we value coverage over commission with regards to our clients. We want to ensure all your professional and management liability needs are met. Contact us today if you have any questions or concerns about your policies.