Basic 101: Errors & Omissions
Basic 101 of Professional Insurance
Basic 101 on Malpractice Insurance
Let’s start with the basics. Most of the above insurance coverage is the same. All terms refer to liability coverage. This covers a person or business that makes an error in providing its services to its customers (patients for medical malpractice insurance). Anybody who provides a service needs insurance.
Why do you need Errors & Omissions Insurance, Professional Liability Insurance, or Medical Malpractice Insurance?
Many businesses mistakenly believe they don’t need Professional Liability or Errors and Obmissions coverage. The professional services that are normally excluded from general liability are not covered by general liability.
Or, some people think that their corporate shield will provide protection. You’re going to have a lot of fun with this one. While the corporate entity may protect you from personal exposure it is not true that your practice or business will last as long as there is a Keeper who is appointed by the court and sends notices to all of your customers to pay him.
General Errors and Omissions Insurance, also known as E and O Insurance or any other name in this blog’s title, is very affordable and well-worth it.
How do you choose the right coverage?
An application will be sent to you when you apply professional liability insurance. You should take plenty of time to complete the application accurately and completely. Add an additional description to your job description if the application doesn’t allow you to. Don’t be hesitant to give exact details. In order to have your insurance fully cover you, they must know exactly what you are doing. Don’t lie or understate the things you do. Tell the truth. After you have submitted your application, you will receive price quotes. Now, it’s time for you to do your homework.
Don’t just look at the price. It is not worth saving $5K, $50K, or more to find out later that you didn’t get the best coverage. A multi-million-dollar lawsuit could be filed against you. You will only get the coverage you want if you’re a price-shopper.
Do your homework
Go to Ambest.com first and search for all the insurance companies from which you have received quotes. A rating of A, A+, or A++ is required for any insurer with billions in assets. Although A-insurers are also available, A+ and A++ are preferred. AM Bests grading system is a way to determine the financial strength of an insurer. A++ can be the highest possible grade. If you are forced to buy insurance from an insurer that has a lower grade than A-, do not. The chances of an insurer not being in business after you file a claim are much higher if it is below A-, or even lower. As in school, you want to get the highest possible grade.
Ask questions
Ask for a copy the sample policy and all endorsements. Quotes do not reflect the policy’s coverage. Check out the policy pages which detail what is excluded. Ask questions if you notice anything that could affect your coverage. This applies to what is covered. But, it is often surprising what isn’t.
Ask specific questions and request a written reply from the broker. Keep the response in your file. It is also a good idea for your attorney to spend an hour reviewing the policy. An insurance policy is a contract. You or your broker must have a JDL to be able to fully review an insurance document.
You can save millions on your insurance and your business by choosing wisely. Do your research before purchasing the insurance coverage.
About HCP National Insurance Services
HCP National is your one-stop insurance shop. We provide all lines of insurance coverage including employment risk management, ASO and Stop Loss Insurance, Fully Insured Managed Care Programs, Medical Malpractice E & O and D & O, Reinsurance, Product Liability, BOP’s, Workers Compensation, All Forms of Property and Casualty Insurance.
