Many business owners believe that their standard commercial insurance policy will protect them from any and all risks. Unfortunately, this is not always the case. There are a number of perils that standard commercial policies do not cover, which is why it’s important to have an errors and omission (E&O) insurance policy in place. E&O insurance protects businesses from claims of negligence, errors, and omissions. If you’re wondering who writes E&O insurance for businesses, the answer may surprise you. Read on to learn more about this type of insurance and who provides it.
What is Errors & Omissions Insurance?
Errors and omissions insurance (E&O) is a type of professional liability insurance that protects individuals and businesses from financial losses arising from errors or omissions made in the course of their professional activities.
E&O insurance can cover a wide range of risks, including:
– Negligence: Failing to provide the level of care that a reasonable person would expect in similar circumstances.
– Breach of contract: Violating the terms of an agreement with another party.
– Misrepresentation: Making false or misleading statements about products, services, or your qualifications.
– Copyright infringement: Using someone else’s copyrighted material without permission.
E&O insurance can be vital for professionals who provide advice or deliver services to clients, as even the most well-intentioned mistakes can lead to costly litigation. If you are found liable for damages resulting from an error or omission, your E&O policy can help pay for your legal defense and any resulting judgments or settlements.
Who needs Errors & Omissions Insurance?
If you are in the business of providing professional services to clients, then you need Errors and Omissions (E&O) insurance. This type of insurance protects you from financial losses arising from mistakes or omissions in your work.
For example, let’s say you’re an accountant and you make a mistake on a client’s tax return. If the client sues you for damages, your E&O insurance would cover the cost of your legal defense as well as any settlement or judgment against you.
E&O insurance is also known as Professional Liability insurance. It is important to note that this coverage is not included in standard business liability policies, so if you need it, you will need to purchase a separate policy.
How much does Errors & Omissions Insurance cost?
There is no definitive answer to this question as the cost of Errors & Omissions Insurance will vary depending on a number of factors, including the size and scope of your business, the industry you operate in, and the level of coverage you require. However, as a general guide, you can expect to pay anywhere from a few hundred dollars to several thousand dollars per year for a policy that provides adequate protection for your business.
How to get Errors & Omissions Insurance
If you’re in business, chances are you need Errors and Omissions (E&O) insurance. E&O insurance protects businesses from claims of negligence or failing to deliver on promised services. If you make a mistake that costs your client money, damages their property, or injures them, they can sue you and E&O insurance can help pay for your defense and any damages awarded against you up to the policy limit.
E&O insurance is also known as professional liability insurance or malpractice insurance. It’s important to note that E&O insurance does not cover intentional mistakes or criminal acts.
So how do you get E&O insurance? Many businesses purchase E&O insurance as part of a business owner’s policy (BOP). A BOP bundles together several types of coverage into one policy, including property damage, business interruption, and liability coverage. You can also purchase E&O insurance as a standalone policy.
When shopping for an E&O policy, be sure to ask about the following:
– The limits of coverage: How much will the policy pay out if you’re sued? Keep in mind that the costs of defending a lawsuit can add up quickly, so it’s important to have enough coverage to protect your assets.
Conclusion
There are a few companies that write $1 million errors and omission insurance policies, but they are typically geared towards larger businesses. If you’re a small business owner, you may be able to find a policy with lower limits that will still provide some protection against claims of negligence or malpractice. Talk to your insurance agent to see what options are available to you.