The need for Error and Omissions Insurance
The need for Error and Omissions Insurance
Without fail, the coverage needed by businesses in the insurance policy they purchased is not included in the policy. At the start of a business the owner must buy a type of insurance to cover it, generally this would be liability or property insurance. Unfortunately, in an effort to save money, too many business owners do not purchase adequate coverage or even a policy at all. However, it will wind up being their loss in the end when there is a claim uncovered by insurance.
Some common policies of business insurance include liability and property insurance. A policy type that includes theft, loss, physical damage and other items is property insurance. Included in most property insurance for businesses have claims including damage done to heavy machinery, outside hanging signs, furniture, property of a neighbor (in case a tree limb falls on some else' property etc.), some kinds of water damage, fire damage, damage to the facilities structure and other property. In addition to this, property insurance usually covers businesses in the event of loss of these said items from theft whether inside or outside.
A liability insurance policy for businesses covers losses that are intangible. An example of this would be if a customer suffers an injury while in the store or on the business' property which results in a claim being made against the said business, or in the event that a customer brings a suit against, the liability coverage will then pay for medical bills, defense, disability etc. including settlements and court fees.
One insurance policy for businesses that is rarely purchased though it should be is errors and omission insurance. This form of insurance coverage protects businesses in the case of malpractice. A client could potentially sue a business in a case of faulty performance if they are given advice by said business that leads the client to a financial loss. An errors and omission policy, also known as an O and E policy, will cover any damages resulting in the claim.
This type of policy also covers facts that are omitted, papers misfiled leading to loss of finances, or the wring performance of the professional's job in which a client can then sue the company or file a claim. Any damages given to the client in additional to court costs and settlements, and fees for defense would then be paid by the O and E policy. The Error and Omissions Policy though most needed is generally the most underutilized and neglected policy for businesses which has resulted in damages in the millions paid to clients due to lawsuits against professionals who make mistakes in their business practices. This vital policy can protect businesses and even help them to avoid bankruptcy resulting from settlements and defense fees in law suits.
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