All of us are humans and making errors is a part of our nature. A client may believe any error was made or overlooked, and may end up claiming against errors and omissions policy. These clients claim for compensations for inadequate work or negligent actions by the business owners. For this reason, insurance companies sell errors and omission insurance policies to the professionals who want to protect themselves from those claims.This article contains some important information regarding an errors and omission insurance policy.
Overview of Policy
This form of insurance is for those people who want to get coverage for themselves and their company against the claims by clients in which to hold them responsible for poor services. However, the cases may vary depending on the situation. The claim can be due to the failure to meet the client’s expectation of services. The losses incurred in the form of claims are covered by the insurance company.
This policy is openly available for all professionals but the name of the insurance policy varies, depending upon the profession. This insurance policy is termed as malpractice insurance for chiropractors, dentists, doctors & medical professionals, while it is known as professional liability for the lawyers, engineers, architects, and accountants. The coverage remains the same for all professions regardless of the titles. Usually, an error and omission insurance policy covers defense costs, judgments and settlements.
Necessity of Errors and Omissions Insurance
It is a matter of fact that we are neither a perfect human being nor a professional. All of us make mistakes even if we have the best team of employees and best strategies for our company. No one wants to give their clients inappropriate work, but what if an aggrieved client files a lawsuit even if the issue could have been resolved in person? In such a case, you may end up spending thousands of dollars to protect the lawsuit regardless of the groundless allegations. These claims will bankrupt you in the end and put your professional license in danger.