Posted: Wed Jan 11, 2006 5:09 am Post subject: What is an error and omissions insurance
Hi all...
What is error and omissions insurance? Does it cover malpractices and errors? Is it included by default to the commercial liability policy? _________________ Register Now to have your Insurance queries solved.
Posted: Wed Jan 11, 2006 5:29 am Post subject: error and omission insurance
Error and omissions insurance coverage is a business and commercial insurance that provides protection to your company from possible business damages and the lawsuits. In addition to that it covers the malpractice and errors for you and your hired employees.
It is not included in the general liability policy; instead it can be purchased separately.
Hope you have got the answer. _________________ Register Now to have your Insurance queries solved.
Posted: Thu Jan 12, 2006 5:24 am Post subject: error and omission insurance
E&O insurance provides the protection for your company from the claims of your customers due to the errors or the failure of your work to perform as promised in your contract. The coverage protects against financial losses from lawsuits.
You are always at some risks no matter how carefully you perform your job. This insurance is designed to help cover your defense costs and ultimately the final judgment if you do not win the case.
Two types of E&O insurances are there in general:
•Claims must be made during the policy period.
•Claims that occur due to error, omission, or negligence in regard to your duties.
There are exclusions to the E&O insurance.
1. claim arising from damage you cause to a property.
2. claim resulting in dishonest or illegal acts by you.
3. claim regarding polluted property.
4. claim against you if you cause bodily injury or death.
The policy has deductibles for the damages and for the defense costs. Often it has a deductible in excess of $1,000.
Most insurance companies reguire one to have E&O insurance as terms to be appointed by them to sell. While a LLC limits your exposure it would be adviceable to optain E&O insurance for yourself or company. Watch out for exclusions, such as not being covered if a third party sues you instead of a direct client. Such as a Son of your Client sueing you for not advicing LTC and then the need comes up. A notable case involving a Financial Planner was sued and lost, his E&O Ins. didn't cover him since it was a third party (not his client directly) that brought about the lawsuit.
