Errors & Omissions Insurance
Errors and omissions insurance is an important policy to have in place if your business provides consulting services, financial advice, insurance services, or legal services. E&O insurance protects a business from claims made against it, against its employees, or against other professionals for negligent actions or inadequate work. This type of insurance can help to cover the cost of going to court as well as any settlement your company might have to pay the claimant.
At IPA Risk Management, LLC, we conduct a thorough review of your company and its needs before writing a policy for errors & omissions. We work to build long-lasting relationships with our clients from day one. Call our office in Rochelle Park, New Jersey, at 201.797.1084 to schedule an appointment with our brokerage.
What does the E&O insurance cover?
When you acquire an E&O policy for your company, you are doing so to cover the following claims that could be made against your company:
- Violation of good faith and fair dealing
- Inaccurate advice
- Personal injuries, such as libel and slander
E&O insurance is a form of professional liability insurance. Should a claim be filed against your company, attorney fees, court costs, and administrative costs can get very expensive to cover out-of-pocket. This type of insurance policy can help to cover any of the following:
- Court costs: paying for expert witnesses or reserving a courtroom
- Attorney fees: these range from $3,000 to $150,000
- Administrative costs: you will need the help of legal assistants, court reporters, office managers, and receptionists to help build your defense
- Judgments and settlements: these can range from a couple of thousand dollars to millions of dollars
Should your business not have E&O insurance, you risk paying all of these costs out-of-pocket. However, if you have this coverage in place, you will have peace of mind that protection is there should you ever face a claim.
What isn’t covered by E&O insurance?
It’s important to note that E&O insurance will not cover everything, which is why you should speak with a member of the IPA Risk Management, LLC, team to discuss the additional insurance policies your company needs in order to protect itself from claims.
General liability claims
E&O insurance will not cover a third-party claim of property damage or personal injury. You should have a general liability policy in place to protect against these types of claims.
Purposeful wrongdoing and illegal acts
E&O insurance will not cover a claim made by a customer that you purposefully misled them or broke the law while performing services for them.
Claims from an event prior to the date of the policy
The E&O insurance policy you purchase for the company will only cover claims made after the date the policy goes into effect. If you need to file a claim from an event prior to the policy, you will need to add a retroactive date to the policy.
Claims from employees
Any claim made by an employee for work-related injuries or illness or lawsuits related to employment practices will not be covered by an E&O insurance policy. Instead, your company needs workers’ compensation insurance or employment practices liability insurance to protect against these types of claims.
Businesses that need E&O insurance
The businesses that usually need E&O insurance include the following:
- Attorneys and law firms
- Accountants and financial institutions, such as accounting houses and brokerage firms
- Engineers and engineering firms
- Advertising firms
- Teachers and educators in private practice
- Educational businesses, such as schools and colleges
- Marketing firms
- Website developers
- Consulting companies
- Cultural organizations, such as museums and galleries
- Medical offices and healthcare facilities
- Barbershops and hair salons
- Printing and publishing companies
- Pet services, such as veterinary offices and pet groomers
The cost of E&O insurance
There are a few different factors that go into determining the cost of an E&O insurance policy and they include:
- The company’s claims history
- The business risk
- The coverage limits you choose
- The location of the business
There are ways to help keep the cost of this policy as low as possible and they include:
- Training your employees
- Check the contracting system you have in place for quality control
- Communicate regularly with clients about any issues to make sure they are satisfied
Call IPA Risk Management, LLC, Today to Schedule an Appointment
Operating one of the businesses mentioned here without E&O insurance is a major risk that you just shouldn’t take. Instead, call the experienced team at IPA Risk Management, LLC, at 201.797.1084 to schedule an appointment with our brokerage. We will conduct a thorough review of your business to determine all of the associated risks and write a policy that offers the best protection.