subject: What Is Not Covered Under Errors And Omission Insurance? [print this page] What Is Not Covered Under Errors And Omission Insurance?
As expected, intentional acts of wrongdoing will not be covered under errors and omissions insurance. These wonderful insurance policies protect people and businesses making honest mistakes in dealing with clients. These mistakes include being negligent in their work, forgetting things and entering the wrong date or information. Every industry needs this insurance.
Errors and omission is a specialized insurance covering accidental mistakes harming other people and other businesses. These types of mistakes include failure to disclose information; in the case of real estate agents, it could be a pertinent fact about the property. For a dispatcher, it may be giving the wrong address for a load of freight. Advertising professionals may run ads at the wrong time. Most of the time these mistakes can easily be corrected; sometimes they cause hundreds of thousands of dollars damage to the customer and their reputation. These insurance policies are designed to cover both legal defense and damages incurred by the insured. One issue to be discussed is the innocent party protection. This insures the company has coverage in case a sales person or company representative has information or makes a promise without notify the company, which results in a claim. In this case, the company is innocent and needs to be protected from the actions of an employee or representative.
These are specialized policies. Intentional acts of fraud, wrongdoing or criminal acts are not covered. The insolvency of the business, any type of employee problems including disputes, contracts and retirement policies, pollution and toxic waste, unlawful discrimination, physical damage to other people and the liability assumed under any type of agreement are common exclusions. A careful review of an errors and omissions insurance policy will familiarize businesses and managers with the policies and the coverage.
To locate the best errors and omissions policy for each business, the business should find an insurance agent specializing in that industry. That agent already knows how the industry operates, where the liabilities are and how to reduce risks. Spending 15 or 20 minutes discussing the business operation with this type of insurance agent guarantees that agent understands the company's operation and what insurance is needed.
The real benefit of errors and omission is that it allows the company to continue in business when it is named in a lawsuit. Some are justified and others are just a creative endeavor. Both types of lawsuits require an active defense; these insurance companies hire experienced attorneys specializing in the industry named. The purpose of these attorneys is to aggressively defend against frivolous lawsuits or to mitigate the damages in a legitimate claim. The company and people can continue operating their business and leave the legal issues in the hands of competent people.
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