Professional liability insurance, also referred to as errors and omissions insurance, is a specialized insurance policy designed to cover businesses and individual professionals against mistakes they may make during the course of business. While not all businesses have a need for professional liability insurance, many service providers who are offering a plethora of different services that require special training or further education will have a need for this type of commercial liability insurance. If you fail to purchase this optional insurance policy, you could face lawsuits and financially damaging claims that could leave you bankrupt and damage your reputation. Protect your business and the profession you have dedicated so much time to by investing in errors and omissions insurance.
The main purpose of an e & o insurance policy is to provide professionals with coverage for risks that are specifically excluded in a general liability insurance policy. General liability policies are designed to pay for injuries to a person or damage to third party property caused by the negligence of the company. While errors and omissions insurance also covers negligence, it specifically covers negligent acts that arise in the course of performing services. These acts must be unintentional and cannot be illegal or the insurance provider will not cover the filed claim.
Errors and omissions and professional liability insurance contracts will pay for more than just a filed claim. If the claims adjuster feels that the claims are unfounded, the policy will pay for investigative costs, defense costs and legal fees, and judgments awarded to the claimant through the court. If the company feels the claims are founded and there is evidence provided by the claimant to support this, the policy will pay settlement amounts that are reasonable. Studies have shown that one of the primary reasons that businesses go out of business when lawsuits are filed against them is because they cannot afford to defend themselves with quality legal representation. With errors and omissions insurance, businesses will not have to pay out of pocket for defense or settlements.
Professional liability insurance comes in coverage amounts of $1 million dollars. Professionals can choose limits of 1 million to 10 million dollars in coverage depending on their budget and their occupation. Be sure to consult a reputable and knowledgeable insurance agent dealing in professional liability insurance to choose a policy that is sufficient and covers all of the services you provide.
There are several resources online that educate professionals on which coverage options you should choose. If you are a real estate agent or mortgage broker, you may require a different policy than an insurance agent or notary. Be sure to compare policy premiums and coverage limits and protect your professional reputation with the right professional liability insurance.