The Basics Of Errors And Omissions Insurance
Business owners must carry a variety of different insurance policies to build a comprehensive
insurance portfolio that will cover them against the financial harm that can be caused by claims. While general liability insurance is designed to cover a business against liability lawsuits where they are found negligent for bodily injury or property damage to a third party, there are situations in which a general liability policy will not provide coverage. If you are a professional offering services to communities throughout the nation, it is important to educate yourself on errors and omissions insurance. Because this is a special type of coverage, you should understand who needs this form of insurance and what it is designed to cover to avoid gaps in your insurance portfolio.Errors and omissions insurance, also referred to as professional liability or malpractice insurance, covers a company or an individual against liability claims that may arise out of giving inaccurate advice, recommendations, solutions, or services that cause financial loss to the client. A standard general liability policy and business owners package will exclude coverage for these circumstances. Because of these exclusions, it is essential that professionals offering services protect themselves by quoting and binding errors and omissions coverage.
While no professional who has received training within their field wants to jeopardize their career by making mistakes, the fact of the matter is that people are only human and mistakes happen. Errors and omissions insurance is available in denominations of 1 million dollars. While 1 million dollars of coverage is the minimum amount available by any company, most insurers will offer coverage limits up to 10 million depending on the type of professional they are insuring and the individual's claims experience.
The coverage limit will pay for claims as well as legal defense if the claims are considered unfounded by the insurance claims department. Professionals should realize that even claims that are consider unfounded can be financially damaging to their business. Legal defense, court costs, settlements and judgments can add up to hundreds of thousands or millions of dollars. By paying only a small premium annually, you are protecting yourself against a claim that could put you out of business for the remainder of your life. Professionals in all industries who are held to a high standard because of their education should invest in e & o insurance. Common professionals include: real estate agents, insurance agents, IT technicians and firms, physicians, contractors, architects, mortgage brokers and others should all invest in this affordable coverage.
Quote specialty insurance coverage through commercial insurance brokers and budget for e & o insurance. Once you receive quotes, you will be surprised at how affordable the coverage truly is. Take proactive steps to protect what you have worked for hard for by binding e&o insurance.
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