Errors and Omissions liability insurance protects businesses in the event that the service they provided unintentionally failed to meet a client’s expectations. When weighing the cost of Errors and Omissions insurance against the risk, it is helpful to ask the following questions.
1. How Risky is My Business?
If you are a doctor, there is no question about purchasing Errors and Omissions insurance. If your profession does not generally involve life and death, the decision to purchase E&O insurance may not be so simple. Seriously considering how difficult it is to always deliver what your business promises is the first step in deciding whether E&O insurance is right for you.
2. How Often are E&O Claims Filed in My Field?
Insurance companies have a good idea of how much to charge businesses and individuals in fields commonly covered by Errors and Omissions insurance. If your business falls outside of these common categories, an insurance company may decide to charge you a higher rate to be safe. Knowing how often Errors and Omissions claims are filed in circumstances similar to your own can help you know whether you are being quoted a fair rate.
3. Can My Trade or Professional Association Help?
Trade and Professional associations often offer Errors and Omissions insurance packages to their members. These deals are tailored to meet the needs of a specific profession, so you can feel confident you are not getting to much or too little coverage.
Errors and Omissions liability insurance should not be a prohibitive expense for any entrepreneur truly in need of protection. Learning about the standards in your industry and working with an insurance company familiar with errors and omissions claims will help ensure that you are protected appropriately.