Error omission insurance is defined as a type of insurance that business professionals use for liability protection. It is necessary for real estate agents, brokers, insurance agents, attorneys, third party executives and others who maintain the responsibility of quality control. In order to protect their business and their service providers, most companies need an insurance policy for Error Omission Insurance.
This type of insurance is also referred to as professional liability insurance and helps protect professionals, the company and individuals in the event a lawsuit occurs. Error omission insurance costs vary and are dependent on your history of profit and loss, the number of employees your business has, your business revenue and the type of services your business provides.
Your business is completely protected in the event of a financial loss to a client or customer due to an error or an omission. The error omission insurance policy covers a large portion of attorney fees and other court costs. Mistakes can occur even with the most professional and put-together organization; because of this, is essential to have an errors and omission policy if you provide any type of service to the public.
Each individual insurance policy is different and should be chosen based on your business’ legal structure. Determining whether your company is a sole proprietorship, corporation, partnership or Limited Liability Company determines who is covered under the error omission insurance policy. Before deciding which type of policy you will choose for your company, first consider the type of services you are providing, the names of those who are covered and the legal structure of your business.