subject: Why You Need To Invest In Errors And Omissions Insurance [print this page] Why You Need To Invest In Errors And Omissions Insurance
If you are a professional and you operate your own business, chances are you understand the importance of creating a comprehensive insurance portfolio. Insurance is designed to provide you with coverage for practically every different situation. While you are not expected to know the ins and outs of insurance, it is important to take proactive steps to researching what type of insurance is essential in the industry in which you serve. Without educating yourself on the types of insurance policies you need, you could be leaving yourself exposed to potential lawsuits that are not covered under your standard policy. Educate yourself on what errors and omissions insurance is. In addition, who needs this type of coverage to avoid gaps in business liability insurance?
Errors and omissions insurance also referred to as e & o insurance is a form of business liability insurance that covers exclusions that are found in a standard general liability contract. While many business owners put a strong focus on their Business Owners Policy, several fail to understand why they have a need for errors and omissions insurance. If you are a professional that offers services in return for a fee, chances are you have a need for both general liability and e & o insurance.
General Liability insurance will cover claims that arise if your business is found negligent of causing injury or damage to a third party's person or property. These policies specifically exclude financial damage that is caused to a client because of an error or mistake. Errors and omissions insurance covers this gap and is a specialized business liability insurance policy that is tailored to cover mistakes and errors that are made during the course of your services as a professional.
A standard e&o insurance policy will pay for not only judgments and settlements; it will also pay for defense costs associated with a claim. Even if the claim is unfounded, there is a need for this type of business liability insurance. If you do not have errors and omissions insurance, you will be responsible for paying for the cost of defense out of your own pocket. For unfounded claims, it can become very costly to prove you were not negligent and were not responsible for making a mistake.
Carrying errors and omissions insurance says a lot about you as a professional. Customers are more likely to trust in you and the services you offer if you are taking precautions to ensure that your mistakes will be paid for. Choosing not to carry e & o insurance can become a costly decision. While you are saving money annually, the cost of a lawsuit can leave both you and your company bankrupt. Receive quotes and consult with a commercial agent to review your insurance portfolio.
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