subject: Why Professionals Should Carry E&O Insurance [print this page] Why Professionals Should Carry E&O Insurance
If you are a professional, offering services to the community or the nation, you must build a comprehensive insurance portfolio that will cover you and your business in the event of a lawsuit or a claim. While most business owners will invest in a BOP, also known as a Business Owners Policy, many overlook the need for e&o insurance. E&O insurance also referred to as errors and omissions or professional liability insurance plans, cover liability risks that are excluded in a general liability package. Designed to supplement your BOP plan, errors and omissions insurance will cover gaps that are commonly found in an commercial insurance portfolio, professional liability insurance is a wise investment that could save you thousands, if not millions, of dollars in the future.
Errors and Omissions insurance covers claims and legal expenses associated with lawsuits filed by clients because you made errors or acted negligently while performing your professional services. Because most professionals must undergo years of training to develop a skill and knowledge in their field of work, they are held to the highest of standards. If the professional fails to meet the standards that are expected in their line of work, they can be found liable for financial injury to their client. E&O insurance also covers additional claims such as slander, libel, and breach of contract, which are all excluded from the general liability policy form.
Professional Liability insurance packages are available for a variety of different professionals including insurance agents, home inspectors, real estate agents, appraisers, notaries, accountants, architects, contractors, engineers, mortgage brokers, financial consultants and many more. A more specialized policy will be formed for medical professionals. This policy is referred to as medical malpractice insurance and it acts in the same way. If you have undergone special training or you are required to carry a license within your field of work, chances are you should have errors and omissions insurance.
All e&o policies will have a claim limit and an annual limit that it will pay out. The claim limit, generally in denominations of 1 million dollars, is the maximum the insurance company will pay for claims, legal fees, court costs, settlements, and judgments for one claim. The annual aggregate limit is the maximum the policy will payout within a year no matter how many claims are filed. With benefits available all the way up to 5 million from some companies, professionals will have more than enough protection.
Choosing not to invest in errors and omissions insurance could leave you at risk for potentially damaging claims. Because premiums are based on the policyholder's liability exposure, they will vary significantly between professions. Contact your commercial insurance broker and discuss your options for e&o insurance and get the peace of mind you need.
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