The Difference Between Errors And Omissions Insurance And General Liability
If you are professional offering services or professional advice
, chances are you should consider investing in errors and omissions insurance. Also, referred to as professional liability insurance, e&o policies are designed to cover liability claims that arise that are caused by faulty performance and errors in your work. Most professionals who have obtained continuing education or specialized training for licensing have a strong need for errors and omissions insurance. If you are carrying general liability insurance to satisfy the state or local governments governing your business license, do not assume you are covered for everything. Understand the difference between general liability and professional liability, and make a wise investment for the protection of your assets and your reputation.General liability insurance is liability insurance policy that is designed to cover specific claims or lawsuits that may arise in the course of doing business. General Liability is most commonly purchased as a business owners package policy, which includes liability and property coverage. Covered liability claims and lawsuits include bodily injury, property damage, personal injury, advertising injury, slander and libel. The insurer will pay for unintentional negligence claims that will pay for injuries or damage to a person's body, property or character up to the limits stated on the policy declarations page. Defense costs, compensatory and general damages are all covered when a claim is filed. Intentional acts and punitive damages are excluded.
A general liability insurance policy specifically excludes errors and mistakes a professional make during the course of a contract or service. To cover this gap in coverage, professionals offering a service should invest in errors and omissions insurance. This specialized form of insurance is one of the most overlooked types of policies in the commercial platform. If you are guilty of breech of contract or you make a mistake in your profession that financially harms your customers, you could face a financially damaging civil lawsuit. E&O insurance is designed to pay for legal defense costs, settlements, investigation and judgment awards if the claim is founded and proven. Even if you are not guilty of making a mistake, defending your company can cost thousands and put you out of business. An errors and omissions policy will pay to defend your company and protect your business assets.
One of the biggest mistakes you can make as a professional in any industry is not investing in insurance that will protect your assets. Mistakes will happen in any industry, no matter how big or how small. Consult a licensed commercial insurance broker or agent and discuss your need for errors and omissions insurance. By building a comprehensive insurance portfolio, you will have the peace of mind you need to operate and known you are covered.
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