Is E & O Insurance Necessary Or Not?

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Getting e & o insurance (errors and omission) can be very beneficial to your company

, and sometimes is mandated by law as well. This is a very specific kind of coverage that a small percentage of the population needs. However, for professionals who have large amounts of responsibility, it is essential.

This is insurance that protects you if a customer sues you for mistakes made on the job. An example would be a home inspector who failed to see a flaw in the building, and it ultimately cost the buyer $1,000,000s to fix. In this instance, the home inspector can definitely expect that they will be named in a lawsuit.

If you are sued, it can be disastrous for your business. Not only are you at risk of paying a huge sum if the court rules against you, but even the legal fees alone are very high. In addition, you very likely could be on the hook for the claimants legal fees as well, if you lose the case. Fortunately, this insurance covers all three expenses. In addition to covering you for these expenses, most insurance companies will have a group of lawyers that they can recommend you if you are being sued.

Every professional knows that if they fail to deliver on their promises, they can be sued. However, some customers will charge you with negligence even if on the surface it appears as if you fulfilled your duties. Therefore, no matter how good and how careful you are, there is always a chance that a customer out to make themselves rich will sue you.

In other words, no matter how careful you are, a lawsuit is a possibility. For certain professions, every error is a costly one. For this reason, if you have a near perfect track record, it might be wise to get e & o insurance.

In addition, a common reason professionals choose not to get it is they think general liability coverage will be sufficient. However, this is not true. Make sure that when talking with the insurance company, you get an agent who specializes in e & o coverage. This way, they will be able to explain the important differences.

Therefore, if you determine you need this coverage, you now need to find the best company. There are many firms that provide this coverage, so finding the best one is no easy task. One of the top methods is to just ask others you know whom they use. For instance, if you are a home inspector, you no doubt know other home inspectors, and therefore finding out the company they go through can save you a lot of time.

As far as getting the right plan, you just need to think about how much you have in savings, and then figure out the maximum amount you could be sued for. Then, get a policy that covers the difference between those two numbers. There is no point in getting e & o insurance if it does not cover you for enough money. This is how to get the best coverage now.

by: Bob Roberts

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