Errors & Omissions Insurance (E&O Insurance)
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Errors and omissions insurance protects companies, their workers, and other professionals against claims of inadequate work and is a form of professional liability insurance. It would also protect companies against claims of negligent actions made by clients, and anyone who provides a service. This would include doctors, lawyers, financial services, insurance brokers, and even wedding planners.
E&O insurance protects companies against the full cost of a claim made by a client against a professional who provided a poor service or advice. It covers both court costs and any settlements up to the amount specified by the insurance contract. All professional advice-giving or service-providing businesses should have errors and omissions insurance because, without it, your company will be held liable for damages and any fees associated with a legal team. This type of insurance would either mitigate or eliminate potential liabilities, and you typically cannot proceed without it.
E&O insurance provides companies with several benefits, although this aspect will vary depending on your policy and the issuing insurance company. It may or may not cover temporary employees, claims in various jurisdictions or claims stemming from work done before the policy was in force. It is also important to note that these policies do not cover criminal prosecution and certain liabilities that can arise in civil court not listed in the policy.
Errors and omissions insurance is also available for businesses outside of the financial industry, so engineering firms, non-profits, general maintenance companies and contractors can also apply for this type of insurance. Dentists, doctors, and other medical professionals need E&O insurance, which is referred to as malpractice insurance, while other professionals, like printers and wedding planners, will also need this type of insurance.
The cost for this insurance will depend on your policy and the type of business that is being covered. Its location and any previous claims that have been paid out in the past will also be factored into the policy price. A company or person with several litigation problems will be considered higher risk and will find their E&O insurance to be more expensive.
Whatever the cost, having this type of coverage is extremely important. It will help your company avoid a massive financial hit and even prevent bankruptcy, which can otherwise occur. If you are in the business of providing professional advice or professional services, errors and omissions insurance should be considered, and most regulatory bodies mandate employees to obtain this type of coverage, either through their employer or independently. This is especially true for those working in the financial industries, like real estate, accounting, and insurance.
If you are interested in this type of coverage or if you require more information about errors and omissions insurance, the experts at isure can help. We specialize in commercial insurance, so feel free to contact us today to learn more!
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