Errors and omissions insurance is a must have for professionals who need to protect the reputations of their businesses. This coverage protects a professional and his or her practice in the event that a client decides to pursue a lawsuit. The policy holder is covered when a client makes a claim that his or her service or lack of service has caused some type of damage. The insurance works much like malpractice insurance for doctors in that it covers the professional’s legal fees and any damages that must be paid up to a certain amount.
Some states require certain kinds of professionals to have this insurance, so one must check with the state’s mandates to know if and how much coverage he or she must have. Those who work under another’s practice may have coverage with the company, but may opt to get additional coverage that is exclusive to them in order to be sure their individual needs are taken care of. Sometimes coverage with a larger business does not cover the employees, so each one must make a decision about seeking individual coverage.
Errors and omissions insurance is not the only type of coverage professionals must consider, especially if they have their own practices. This is a different type of coverage than general liability or commercial property insurance. Unlike these other policies, it does not cover property damage or loss of physical assets to the professional. In this case, the professional will need other policies to cover property, vehicles, supplies, materials and any other assets one needs in order to protect these assets.
Those who have employees working under them will also need some type of workers compensation insurance. There are also group health insurance plans for small business owners who need to offer this benefit to attract the best employees. If vehicles are frequently used for business purposes, not only should the vehicles be insured, but the people who drive them should also be covered under a policy. It is very important for business owners cover all their bases when it comes to insurance.
Even if a claim is baseless, one needs errors and omissions insurance to cover legal fees. Clients can decide to bring a lawsuit for any reason, so professionals must have the means to protect their good names. Many insurance carriers specialize in this type of coverage, so it is possible for a professional to find a policy that is specifically tailored to accommodate his or her particular profession. Still, it is important to shop around in order to get the best rates for this very important coverage. Protecting one’s business must go beyond covering only the physical resources necessary in order to be successful.