subject: Why Secure Errors And Omissions Insurance [print this page] As skilled as most professionals can be at their jobs, not a single one of them is perfect. Architects, software developers, accountants, financial brokers, insurance agents and other professionals whose job duties entail being accurate with numbers and delivering precise facts always need to protect themselves against expensive litigation in the event that an error they make causes harm to clients or others. Working experts who are at risk for this kind of liability secure errors and omissions insurance, this is also known as malpractice insurance.
If something harmful happens and errors and omissions insurance is not in place, the effects on the individual professional (or his or her company) could be devastating. Mounting a legal defense and protecting personal or company assets against a suit for an unintentional error is not something typically covered by the traditional liability insurance that is used to compensate for harm or lost property.
As a working professional, when you secure an errors and omissions policy, you are protected against what you do, what you fail to do and negligence in your job but not against criminal acts, especially if they are intentional. It is also not a policy you want to get in place of liability insurance. It is additional coverage that should never be used as a substitute.
It is important to see if your errors and omissions insurer provides tail coverage, which gives you two to five years after your policy has lapsed to report claims - though the act, which led to harm, must have happened during the time you had coverage. Prior acts coverage is important for professionals who purchase other firms and need to cover any acts that might have been committed by the newly purchased company prior to purchase.
Most insurance experts recommend holding on to your policy (or policies) for at least 10 years after they expire. You never know when something in one of those policies might be able to protect you from having to pay for damages.
If you are part of a larger company, it is always best to explore what kind of errors and omissions insurance may be available to you through your firm before initiating a policy on your own. Premiums are generally lower for group insurance than they are for individuals.
Errors and omissions insurance is not something the professional can opt out of over the course of a career. It is true that probability of making a mistake is usually low, but there are some things that you cannot control (if you are an IT technician and a program that you did not back up loses data, for example). However, much of what you do can be precise and earn you a solid reputation as a leader in your field, it is equally as easy to make one human error and see it all go wrong.
by: Bob Roberts
welcome to Insurances.net (https://www.insurances.net)
