E&O Insurance Measures
E&O Insurance Measures
When the topic of insurance comes up in daily conversation, most people, contractors in particular, see red, as if they were bulls angered by a matador. Professionals see it as a disgusting waste of company funds, an unnecessary expense that is likely to never even be used. So this begs the question: why should anyone, let alone careful and trustworthy contractors, waste both valuable time and money searching for an ideal and yet purposeless piece of paper, certifying insurance against lawsuits? Insurance is the key factor in risk management programs, passing on the expensive factors in the unknown in everyday life. E&O Insurance stops up loopholes in a general commercial insurance policy, providing valuable protection to everyone in the company, from the owners, directors, executive officers, partners, all the way down the managerial chain to janitorial staff. Just as you have to check the oil in an expensive car or truck to ensure that it is properly lubricated and running in an efficient manner, insurance policies make sure that contractors are protected against unexpected catastrophes, and can continue to do their jobs.
E&O insurance is a unique type of insurance that provides coverage for negligence, omissions, or errors committed by the contractor, employees, or manager of the business. No matter how many safety precautions are in place, accidents happen. A simple change in an order intending to add an additional bathroom comes in to the office, but is not passed along to the superintendent, or the superintendent forgets to inform the foreman. The building is finished, and six months later, someone notices the missing bathroom. A minor addition is now an expensive omission. Clearly, mistakes happen. E&O insurance serves to remedy these risks of daily life, as the contractor pays the premium price for the insurance policy and the E&O company covers events that come up.
Typical contractors provide Worker's Compensation insurance for those they employ, as not carrying mandatory coverage such as this is far too costly. Part of compensation insurance covers medical bills and recovery costs when employees are hurt while working or death coverage in the case of something serious occurring at the workplace. Other considerations include punitive fines and damage costs issued by authorities. Insurance should work to keep contractors employed and working even in the case that lawsuits are filed against them. Respect and diligence is key. General liability protection keeps the business from injury done against others and others' property during everyday business. This insurance policy, more importantly, covers legal costs for both justified and unjustified accusations. Contractors often have to give up bonds for jobs they do. Equipment is also insured against theft.
All of these policies play into risk management for contractors. In exchange for a simple down payment on a premium, E&O insurance provides coverage for far more than most policies do.
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