Hi, my name is Karen. Every quarter, I review all of my insurance plans and get multiple quotes to make sure I am still getting the best deals and services. Seriously, my family laughs at me for this obsession. However, in reviewing our policies so many times, I have learned a lot abut insurance. I decided that I wanted to share that information so I started this blog. In particular, I want to help people who are newbies to the world of insurance. If you are a teen driver, a new homeowner or anyone else buying a policy for the first time, this blog is devoted to you. Please read and enjoy!
If you're in business to provide a service of any kind, you may need to consider a specific type of insurance to protect yourself from claims related to your work. This is completely separate from public liability insurance and is more concerned with your professional capability and the consequences of any mistakes. So, what do you need to know about errors and omissions insurance?
A Different Type of Liability Insurance
Many people get this type of insurance confused with public liability coverage. The latter will protect you against claims for injury or loss should someone trip and fall on your premises or you damage their property while you are carrying out your work.
Understanding Errors and Omissions Insurance
Errors and omissions insurance is also a form of liability insurance, but it will cover you if you were negligent, provided inferior or inadequate work, or gave advice that led to a loss of some kind.
Who Could Benefit?
This type of insurance could be beneficial for a wide variety of service providers, including marketers, doctors, lawyers, insurance agents, event planners or financial advisers. The insurance could cover any court costs and a settlement if you are found to be liable following a claim.
Looking at Examples
Imagine a situation where you are a financial adviser recommending a particular investment to a client. Certain riders within your contract may absolve you from any consequential losses, and the client may be perfectly aware of the risks. However, if you should have disclosed specific salient points or been aware of any additional risks to the client based on individual factors, a court may find that you were negligent. In this case, errors and omissions insurance could help to mitigate some of your possible liabilities. It is also important to remember that legal costs can nevertheless be high even if you defend a case and the court finds it in your favour instead.
Do you need This Insurance?
Some professional bodies, especially in the financial industry, may insist that an adviser has errors and omissions insurance. If you are not regulated by any such body, you may nevertheless want to consider the option, just in case. You should talk with a broker to get a quote, and they'll help you to put some coverage in place. When you combine this insurance with well-crafted contracts and clear communication, you may feel less vulnerable to those uncertain risks.
Reach out to a business insurance broker to learn more.
Share21 July 2022
