What Is Unique About Errors & Omissions Insurance?
Errors & omissions insurance handles claims a little bit differently than traditional insurance
. Most insurance companies pay damages to physical problems, such as fire or an automobile accident. Errors omissions insurance is different from this in that it protects your business from mistakes made by a business or employees. The benefit of this insurance is that often times, mistakes are not recognized and identified until many months or even years after the event has occurred. Thus, errors and omissions insurance covers you in the event of these problems. Businesses who are considering switching should know that a switch may cause a lapse in insurance with claims filed during this time not being covered by the new insurance company.Many mistakes happen in the course of running a business, which is what errors and omission insurance is designed to cover. Since most mistakes made in business are quickly resolved, many people forget the need for this type of insurance. Travel agents booking the wrong flight or cruise can quickly rectify the problem, but a real estate agent forgetting to have the new home owners sign an important document can go overlooked for many years, often until a situation arises that needs to confirm their agreement, in which case it was never gotten. The same could be said for an accounting firm that is figuring taxes at the wrong percentage rate.
One of the problems with errors & omissions insurance is deciding which company is liable for the damages. There are very strict policies in place concerning errors and omissions insurances, describing what claims are covered and which are not. This also includes a strict guideline as to when certain claims need to be reported in order for them to be covered. Most errors & omissions companies require the business to call and notify the insurance company as soon as a threatening call or letter related to legal action is established. Before considering changing an error & omission insurance provider, managers need to be aware of such problems. Contacting employees and having them report any potential problems can make the switch between different insurance companies go much smoother.
Most errors omissions policies have a decent period of time after the policy has lapsed in order to report claims. This time frame is usually a few days. In order to have more coverage, tail end insurance is often provided for a greater cost. This type of protection is usually available for around 60 months and is a great option for any business considering switching their service provider.
Most businesses want to avoid lawsuits because it not only damages the reputation of the company, but also causes a morale loss for employees. Errors omission insurance is the answer to this problem, as it provides the protection a business needs from financial consequences related to mistakes employees have made. Employees can continue to work and expand the business while the insurance professionals handle the law and any claims related to the problem. Understanding claims and the insurance policies available will better help you choose an errors & omissions insurance policy.
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