These days we see that there are a lot of lawsuits being filed up against companies. Though these lawsuits filed are mostly baseless and are discarded after a hearing in the court, there are a lot of after effects which might occur due to it. One of the important problems to be faced is the enormous amount of legal fees to be paid. It is during times like that the errors and omissions insurance policy is required. This eases up the tension of the defendant by preventing to pay the legal fees up to a certain amount. Error and Omissions Insurance
These lawsuits have a worse effect than the legal fees; it is the irreparable damage to the reputation of the organization and the individual. If the company has a tainted reputation, then it has a doomed future. The error and omissions policy helps in preserving the reputation by making a settlement even if the defendant is at fault.
There are a lot of factors to be specified in the policy. Some of them deal with the type of employees, if they are based on contract and the applicability of the policy, if it is universal or a specific location.
Different industries require a different kind of policy. It is important to discuss and plan in detail with the insurance provider the type of policy required for a particular industry and the coverage required.
The claims will be covered only after the policy is made; it does not cover charges by fraud. The errors and omissions insurance policy is a necessity for the smooth functioning and security of an organization.