Personal Liability For Small Business

If you face professional risks in your South Carolina small business, it’s important that you have professional liability insurance to protect you and your business. You may believe that your general liability insurance gives you coverage for any professional liability challenges, but this isn’t the case.

What are Professional Liability Risks?

A professional liability problem may arise if one of your customers claims that your South Carolina small business made a mistake or was negligent in providing your professional services.

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For example, if you have a consulting business and your advice caused one of your clients to lose money or another type of loss, your small business could be held liable.

What Type of Coverage Does Professional Liability Insurance Give My Small Business?

Professional liability insurance is more commonly known as errors and omissions insurance and covers your South Carolina small business if one of your clients or customers suffers a monetary loss due to your negligence or mistake.

Your South Carolina professional liability insurance will cover the costs you will incur in defending your small business in a civil lawsuit and will cover your settlement costs.

What Doesn’t Professional Liability Insurance Cover?

It’s important to note that professional liability insurance will not cover all claims that your South Carolina small business may face. The most common exclusions include:

  1. Criminal, malicious, dishonest or illegal acts
  2. Liability for any damages sustained by another insured on your policy
  3. Services you may provide under the name of another business, organization, or charity that is not specifically named in your policy
  4. Property Damage
  5. Bodily illness or injury

What Are Considered Work Mistakes?

It doesn’t matter how careful you may be – mistakes happen. However, if a mistake causes a monetary loss to one of your customers or clients, it could cause a problem for your South Carolina small business.

If a work mistake does occur, your professional liability insurance would kick in if one of your clients or customers tries to sue you because of your work mistake.

What Are Undelivered Services/Results?

There may come a time when the service/product you described to your client or customer doesn’t perform the way it was represented. If that happens you could get sued, and your professional liability insurance policy would apply.

What Are Negligent Services?

Sometimes your expertise can act as a double-edged sword. Your expertise may help you get clients/customers, but it can also set extremely high expectations on the part of your client/customer.

For example, if you are an architect, you have the education and skill necessary to design a building that meets your client’s expectations and complies with all the building codes. But what if you make an oversight that could compromise how safe the building was? The owner of the building could sue you for negligence.

Negligence lawsuits can be expensive, and a South Carolina court may award your client damages, but it also could monetarily punish you in the form of punitive damages to deter you from being reckless in the future.

In this situation, your South Carolina professional liability insurance would apply.

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Please note that South Carolina professional liability insurance only covers economic/financial losses that your client/customer may suffer.

To find out more about what type of professional liability insurance may be right for your small business, or if your professional liability insurance company is denying your claim you should contact the small business attorneys at the Greenville law firm of Bannister, Wyatt & Stalvey, LLC.

Why Choose Bannister, Wyatt & Stalvey Law Firm?

With the experience to address complex family law, criminal defense, and real estate matters, our knowledgeable team of attorneys are here to advocate for you. We operate our law offices on three main principles:



We strive to establish personal trust with each and every client.


We operate with the utmost integrity when dealing with clients and the legal community.


We commit to excellence in all aspects of the legal profession.


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