All About Error And Omissions Insurance
March 5, 2010 7:08 pm BusinessThe tendency to commit errors or mistake is part of our human nature. This explains the fact that even those who have spent many years studying and specializing in a specific subject in order to become so-called experts or professionals are still prone to make mistakes. People who are practicing their professions should leave no room for error. Since, this is not often the case, professionals oftentimes have to face up the troubles such as lawsuits. Fortunately, there is error and omission insurance that can provide financial aid as a compensation for the trouble and hassle made.
Error and ommission is a type of insurance that provides coverage for a single person or a company that does not meet the expected result while practicing one’s profession or rendering service to clients. Error and omission insurance will provide compensation for every error or omission that is perceived by clients. The need for this type of insurance is great among professionals and company owners since error can lead to lawsuits which can take out a lot of revenues for companies and income for professionals. There are lawsuits that may be worthless, however, they still cost a lot of money. Errors done by professionals can take many terms, but more often than not they are called as professional liabilities.
The professionals who can avail of error and omission insurance are doctors, lawyers, architects, accountants, engineers, wedding planners, among others. Most professionals whose job is about rendering services to clients also need error and insurance commission. Companies that offer services for a fee also need error and omission insurance coverage.
Unlike other insurances, error and ommission insurance has no standard set of policies. As professions vary, so policies vary too. Most error and omission policies are made based on claims that have to be made or reported within the policy period. Based on the claims, there are E&O policies that provide defense costs depending on the error or omission made, while others will not cover the expenses for penalty. Moreover, the cost of availing error and omission insurance may also vary depending on the extent of the coverage. It goes to say that people who want to avail of this type of insurance should read the policies first carefully to find out what insurance company can provide the best coverage.
Policies for error and omission may vary, however, there are exclusions which are similar to all. For example, liabilities made before applying for the insurance are not covered. Liabilities done deliberately and dishonest claims will not also be included. Errors that result to deaths are not also covered. It goes to say that not all liabilities can be financially compensated through error and omission insurance.
The coverage provided by E&O is highly important. So, if you are a professional who is prone to make errors and omissions at times, apply for it now!
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