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Also known as errors and omissions, or E&O insurance, professional liability insurance helps out business owners against getting sued due to losses incurred by an error, omission, or act from an employee. Every industry benefits from this type of coverage, from the IT industry to healthcare, accounting and architects. If you’re a professional, this is really something that you need for long term company growth and security. It’s absolutely essential because you can’t guarantee that something isn’t going to happen.
Like the saying goes, it’s better to be safe than sorry. Most industries are expected to have coverage; without it, any business is selling themselves short. This is the lowdown on why every business needs E&O liability insurance, via Hiscox.
What E&O Insurance Covers
If there’s a contract breach where someone does something they weren’t supposed to, an instance of negligence or someone gets hurt because of you or on your watch, then E&O insurance is going to be something that your business needs. Any type of business can have some kind of accident happen that can negatively impact your company, making it imperative to always stay prepared.
However, keep in mind that this insurance doesn’t cover malicious or intentional acts, or whatever restrictions are listed in the contract. Really reading your contract and understanding it will make sure that there are no mishaps when something happens.
In addition, E&O coverage typically only extends to acts, errors and omissions committed by your employees. Losses incurred by executives or management would be covered by directors and officers (D&O) insurance instead.
When purchasing insurance coverage, also remember that whatever has happened prior to the coverage start date is not covered (that would require prior acts coverage). And those with higher claim rates will generally have higher premiums. That’s why it’s good to think of your insurance as a preventative: giving you protection for the future.
Do You Need E&O Insurance?
It’s not required by law to have this kind of insurance, but this doesn’t mean that it’s a good idea to go without it. Some professionals have to have it anyways due to profession requirements by regulatory or licensing boards. More than 10 states have to show proof of coverage in the real estate business, particularly with agents. Process servers across all states are also required to be covered in this area.
While it might not be against the law to not have E&O insurance, it still could be needed in your profession. So many high-risk industries need this coverage, including home health aides, psychologists, social workers, therapists and insurance agents. There are also other reasons why you need this coverage: some clients might require it to work with them and this isn’t limited to construction work and IT fields. If you’re providing some kind of service to a client, make sure you purchase quality E&O insurance. You’ll thank yourself later in the event of a lawsuit that you might’ve never expected.
About Transparity Insurance Services
Transparity Insurance Services was founded for the purpose of helping clients to ensure their property and assets with no hassle. We are committed to providing a simple, easy, efficient, and positive experience to all of our clients, and prioritize open and transparent communication with our clients. Through our excellent customer service and technology, we can help you to find the right insurance program at a competitive price. Contact us today at (855) 889-2037 to learn more about what we can do for you.