Errors and Omissions Insurance: Why is it Important in Pittsburgh , PA
Although thinking about things going wrong is not an enjoyable part of running your business, implementing and maintaining appropriate response measures and loss control practices can be critical in limiting resulting ramifications. Errors and omissions (E&O) insurance should be considered a particularly integral part of these processes, as these policies may provide access to the funds and resources needed when responding to lawsuits and allegations of inadequate services.
What Does Errors and Omissions Insurance Cover?
As its name suggests, E&O insurance, also known as professional liability insurance, can cast a versatile and robust financial safety net across many common allegations of improper professional services or advice. Although exact risk levels and subsequent coverage needs may vary depending on your industry, location and other unique circumstances, an E&O policy is generally an essential part of your loss control measures if you provide professional guidance or services to other parties.
If a client or customer accuses your organization of being responsible for an incident or mishap leading to financial losses, they may sue you. Fortunately, E&O insurance can curb the potentially catastrophic consequences of these lawsuits by helping to pay for legal expenses, such as attorney fees, court costs, settlements and court-ordered judgments. In most cases, this aid may be available in response to the following allegations:
- Professional errors
- Incorrect guidance
- Omissions
- Misrepresentations
- Oversights
- Negligence
- Missed deadlines
- Breaches of contract
- Failures to adhere to professional standards or guidelines
How Much Errors and Omissions Insurance Do I Need?
Your exact E&O coverage needs may vary depending on your organization’s unique circumstances. After all, failing to carry a policy with sufficient coverage limits could mean that particularly significant accidents, errors or other incidents incur losses beyond what your insurance can assist with. When assessing risk levels and ensuring that your insurance is capable of adequately protecting you from potential losses, consider the following factors:
- Industry
- Location
- Operational details
- Employee experience levels
- Estimated annual revenue
- Number of customers you work with
How Much Does Errors and Omissions Insurance Cost?
Like your insurance needs, the cost of coverage can also vary significantly. When quoting you a rate for adequate E&O insurance coverage, the following criteria may be analyzed by insurance companies:
- Location
- Type of business
- Number of clients you work with
- Years in business
- Prior claims history
- Policy details (e.g., coverage limits, endorsements and deductibles)
Get the Right Coverage
At James L. Smith Insurance Agency, we are an independent agency and maintain relationships with dozens of insurance companies. By tapping these resources and our knowledge and experience, we can help your business explore an extensive selection of E&O coverage options, ensuring optimal coverage at ideal rates. Contact us today to learn more.
This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.