subject: Types and Importance of Professional Insurance [print this page] Types and Importance of Professional Insurance
No business is without risks and these risks can present themselves at any stage in the company's life cycle. Whether a small transaction glitch or an internal miscommunication; mistakes in the process can cost the company money as well as prestige.
Employees are an integral part of an organization and a company would fail to function without them. However disgruntled employees can pose to be a serious hazard to a smooth functioning organization and hence a company must take the safe route and secure an employment practices liability insurance.
This insurance protects an organization by providing insurance against discrimination claims or wrongful discharge, which are not covered by general business liability insurances. However, this insurance does not mean that an organization can forego practices of fair employment.
In fact this insurance will not be provided unless the company has a track record of fair employment practices. Employment practice insurance just provides a safety net for the organizations and safeguards their integrity in case of a complicated situation.
On the other hand a directors and officers insurance' is meant for the employee to protect them in case of a malpractice suit or wrongful accusation by the company. Professional insurances are not just created with the aim of protecting just one end of the spectrum. Employment practices liability insurance is a good example of an insurance that protect the rights of the employer in case of any lawsuit against them by the employees.
Securing any insurance coverage requires an impeccable track record by the individual which will help them secure the protection. There is a difference between D&O insurance and an Errors and omissions insurance. While the former is protection against the individual duties and responsibilities the latter protect against professional liability claims that may have occurred due to misjudgment with respect to the products and services of the organization.
Credibility and integrity are crucial while choosing an insurer to protect your organization as well as an individual. It is important to research the track record of the insurance company and the insurance cover before you finalize on any particular company. A misjudgment in choosing an ideal insurance company can cause you more harm than good, and result in losses.
One of the best ways to get information about any company is to use the extensive reach of the internet and research on the various reviews and testimonials. Getting information from peers within your industry too turns out to be helpful in choosing the right insurance company.
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