With any professional business endeavour, error omission insurance is an absolute necessity. Having this coverage can save small businesses from having to pay out of pocket expenses for legal fees and settlements resulting from a client’s claim of negligence. This policy will cover legal fees even if the claim is ruled in the professional’s favor. It will also pay for damages up to a certain amount. However, most of these policies do not cover punitive damages as well as fraudulent, intentional or illegal activities.
In order to get the best coverage on these policies, one should try to find a policy before he or she begins to practice. This insurance usually does not cover expenses made for claims that were made before the policy was bought. One may want to look for the right policy while he or she has a clean record so that the insurance provider knows there is less risk with this particular policy holder. It may also be possible to get lower rates when one attempts to find a policy before he or she has actually performed any services.
Small business owners may have more need of error omission insurance when it comes to employees. The owners are liable for any damage or harm caused by an employee or an independent contracted worker, so coverage must be extended to all of those working on behalf of the employer. A mistake can occur at any worksite, so the employees or independent contractors need to be covered no matter where they are or what job they have been hired to perform.
Even if a professional works under an employer, he or she should consider getting coverage. Some employers have the coverage, but it may not protect the individual employee in the event of a lawsuit. Many professionals decide to get insurance that covers them exclusively in order to assure that they are protected. Furthermore, general liability and property insurance does not include this coverage. In addition, many states mandate that professionals carry this coverage, so one must find out the minimum amount required in order to be in compliance with state law. Coverage may also vary depending upon the particular industry.
It is not only important to protect the property, vehicles and other materials one needs to conduct his or her business. One should also have error omission insurance for a complete insurance folio along with the other policies that protect the business. There are many carriers that not only specialize in this particular policy but also are know how to work with professionals within their respective industries. When one finds the right insurance provider, he or she can feel assured that the business’ reputation will be held in tact.