Errors and Omissions insurance, also referred to as E&O Insurance is a form of Professional Liability Insurance. This coverage is is purchased by companies and professionals for instances when a client claims that they did not get the expected or promised results from the service or advice you provided to them.
Errors and Omissions insurance is usually carried by professionals such as accountants, architects, engineers, and any field where services and or advice is offered for a fee. This extends to many professions including but not limited to fields such as financial advisors, commercial printers, event planners, travel agents and any business with exposure to errors and omissions.
Most E&O policies cover professionals for judgements and settlements as well as the cost of legal defense. Financial responsibilities can add up quickly in many industries, and errors and omissions coverage can provide protection and peace of mind for entrepreneurs.
Imagine a travel agent or wedding planner puts together a $50,000 wedding and honeymoon for a client and list of 100 VIP guests on a tropical island. What happens if the hotel rooms are booked for the wrong date and the guests have nowhere to stay when they arrive? Do you think a ruined wedding and honeymoon could result in a lawsuit for this travel agent? Can you put a price tag on a lifetime event such as this? My guess is the client could, and I have a feeling it could go well over the $50,000 invested! This business had better have errors and omissions insurance.
Remember, claims like that are not covered under many other business liability insurance policies. Without E&O insurance, this business might have to pay for everything out of pocket, including any judgement or settlement that may arise from the claim. And even if the business or professional is found NOT to be responsible for the mistake, the legal fees to protect themselves could be quite expensive. Errors and Omissions coverage can pay for legal defense fees as well.
One last reason to take out an errors and omissions policy is that you can get more clients when you're insured. Your potential clients and customers will have the peace of mind knowing that there is recourse in case anything goes wrong with the service or advice you are selling them.
Errors and Omissions insurance rates vary widely from insurance company to insurance company. That's why it is a good idea to get more than one quote when shopping for this type of coverage. Underwriters will need information about your business, the risks associated with your industry, your history of claims and other pertinent information before they can give you an accurate quote. No two businesses are the same and there is no one-size-fits-all errors and omissions insurance policies. That's why it is important to get multiple quotes and compare policies paying careful attention to limits and exclusions before deciding where to buy E&O insurance for your business.
Errors and Omissions insurance is usually carried by professionals such as accountants, architects, engineers, and any field where services and or advice is offered for a fee. This extends to many professions including but not limited to fields such as financial advisors, commercial printers, event planners, travel agents and any business with exposure to errors and omissions.
Most E&O policies cover professionals for judgements and settlements as well as the cost of legal defense. Financial responsibilities can add up quickly in many industries, and errors and omissions coverage can provide protection and peace of mind for entrepreneurs.
Imagine a travel agent or wedding planner puts together a $50,000 wedding and honeymoon for a client and list of 100 VIP guests on a tropical island. What happens if the hotel rooms are booked for the wrong date and the guests have nowhere to stay when they arrive? Do you think a ruined wedding and honeymoon could result in a lawsuit for this travel agent? Can you put a price tag on a lifetime event such as this? My guess is the client could, and I have a feeling it could go well over the $50,000 invested! This business had better have errors and omissions insurance.
Remember, claims like that are not covered under many other business liability insurance policies. Without E&O insurance, this business might have to pay for everything out of pocket, including any judgement or settlement that may arise from the claim. And even if the business or professional is found NOT to be responsible for the mistake, the legal fees to protect themselves could be quite expensive. Errors and Omissions coverage can pay for legal defense fees as well.
One last reason to take out an errors and omissions policy is that you can get more clients when you're insured. Your potential clients and customers will have the peace of mind knowing that there is recourse in case anything goes wrong with the service or advice you are selling them.
Errors and Omissions insurance rates vary widely from insurance company to insurance company. That's why it is a good idea to get more than one quote when shopping for this type of coverage. Underwriters will need information about your business, the risks associated with your industry, your history of claims and other pertinent information before they can give you an accurate quote. No two businesses are the same and there is no one-size-fits-all errors and omissions insurance policies. That's why it is important to get multiple quotes and compare policies paying careful attention to limits and exclusions before deciding where to buy E&O insurance for your business.
About the Author:
Errors and omissions insurance is something every small business needs to consider. Whether you are a self-employed professional, an employee or a contractor, you may benefit from E&O insurance. To find out more, visit this professional liability insurance blog.
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