When investing in insurance, especially types such as errors and omissions insurance, it’s one business expense you have, with hopes that you will not ever have to depend on it. Certainly the majority of business insurance is paid for this way in the hopes that you never need to put it to use but that’s what insurance coverage is for. Protecting against the variables along with the unknowns in business is exactly what protects you in the case of accidents and furthermore protects your company from losses to its bottom line.
Specifically, in the case of insurance there are numerous types that a business or company must have. When it comes to individuals such as real estate agents, insurance agents, architects, third party administrators, quality control workers and other independent business professionals, errors and omissions insurance is undoubtedly essential. Defense against major losses in property, investments, lives, or other substantial losses is really what the insurance was designed to protect.
There are other forms of insurance that fall under the errors omissions insurance heading. Errors & Omissions is translated to E & O insurance, professional liability insurance and possibly the most common term for it is malpractice insurance. Although the latter kind usually is used in conjunction with the medical field, it can be carried over to a variety of professionals.
The one incredibly good piece about insurance is that most of the time, the premiums are very affordable and if needed they cover what they’re meant to. When it comes to professional liability insurance this is certainly seldom the case. The insurance is designed to cover the costs of lawyers fees in addition to the loss if found guilty. This type of particular insurance is incredibly cost prohibitive and quite different from normal business liability expenses.
In business, quite often it would be suggested to spend on added insurance if you believe the need may arise. In the example of E & O coverage the opposite is true. Sometimes a practical business liability policy and even an umbrella policy can handle a suit. It is wise to seek several quotes and insurance recommendations if a company is unsure what risks they may be exposed to.
One determinant by a professional that professional liability insurance is recommended for your company is projected revenues and employee numbers. Typically such insurance is required if the company has a revenue of at least $1,000,000 and at least 10 employees.
And finally, errors omissions insurance is not handled by the vast majority of business insurers. Contract disputes caused by perceived errors just isn’t a typical coverage that a lot of insurance companies carry. This particular insurance coverage and the type of company that offers it will be covered extensively through companies that only handle the wide selection of professional business liability insurance. Search for a firm that also handles D & O (Directors & Officers Liability), EPL (Employment Practices Liability) together with E & O for by far the most trusted source in protection.
Jordan McPelt has been in the real estate business for over 15 years and swears by errors and omission insurance. Appraisers who do not have errors & omissions coverage are at a disadvantage and susceptible to very risky business.