Update August 31 - 2010 All About "Professional Errors and Omissions Insurance" Information By Insurance Experts

Professional Errors and Omissions Insurance is a type of errors and omissions insurance protects business professionals whose clients could claim damages as a result of the business professionals' faulty performance. The faulty performance may be because of a negligent act, error, or omission by the professional.

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Errors and Omissions Insurance - A Beginner's Primer
By Michelle Hirsch

Errors and omissions insurance provides important coverage to professionals in a wide variety of fields, running the gamut from accountants to film crews to pet groomers to funeral home directors.

Due to its critical nature, it's crucial for professionals to make sure they select an agent well-versed in errors and omissions insurance. Because general liability insurance is much different from E&O, even the most knowledgeable general liability agents usually don't have the right expertise to provide the necessary errors & omissions coverage.

To find the right errors and omissions insurance for your needs, a simple online search to can help identify appropriate agents or brokers. Asking colleagues for referrals is another good option, while some professionals, such as CPAs, can check with their industry's professional associations for suitable recommendations.

Once you've identified potential matches, ask if they can provide:

• The number of errors and omissions policies in your profession on their books
• Several references
• Payment options
• Coverage for independent contractors and additional insureds
• A policy tailored to your specific circumstances
• The ability to choose from among several different carriers

The last item is particularly important: Each carrier offers slightly varied errors and omissions insurance - being able to compare endorsements and coverage helps ensure finding the very best policy for your needs.

After you've found the right E&O insurance agent for your business, the application process is usually the same: fill out an application, provide a resume, and include the insurance portion of the contract you'll be working under (this allows the agent to tailor our errors and emissions policy directly to your needs without questions or uncertainties).

New businesses often are required to provide a business plan to help the agent determine the extent of their errors and omissions exposure.

Most errors & omissions insurance policies last for a full year and follow the company or individual for whom it was written. As you take on new projects or add staff, make sure to add specific names to your E&O policy as needed.

And, when renewal times rolls around, be sure to update your number of employees and revenue figures with your insurance agent.

Like so many things in life, an errors and omissions insurance policy is only as good as the effort you put into it. Be diligent in researching and vetting your E&O agent to ensure the best fit possible.

Michelle Hirsch is the Vice President at Brunswick Companies, a full service provider of insurance and risk management products including errors and omissions insurance.

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Article Source: http://EzineArticles.com/?expert=Michelle_Hirsch

Update August 14 - 2010 All About "Professional Errors and Omissions Insurance" Information By Insurance Experts

Professional Errors and Omissions Insurance is a type of errors and omissions insurance protects business professionals whose clients could claim damages as a result of the business professionals' faulty performance. The faulty performance may be because of a negligent act, error, or omission by the professional.

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Business & Professional Liability Insurance
By Lousie Smith

Every business venture in any part of the world is subjected to several constraints and one of these is the liability that one needs to consider and protect. The liability is a consequence of various errors and omission (also known popularly as E&O) that take place even though extreme caution is exercised to avoid any foreseeable mistakes. Thus it is necessary to carefully plan the concept of business liability insurance to avoid distressing and undesirable legal actions from diverse sources. Insurance companies have therefore evolved comprehensive liability insurance cover for business clients that will as some of them term slash your risks quite considerably. It also increases your business confidence to a large extent and enables you to carry out activities with minimum worry of such risks. Almost all businesses need to invest in liability insurance if they have to comfortably work in an environment that is governed by the consumer's authorities and concerns. It also helps in marketing their instruments that assure the prospective customers to become their long term clients. The Internet will be able to guide you in locating the most prominent and professional organizations that provide such liability insurance cover.

Business liability cover is not the only insurance available to the corporate or personal world. The professionals who work in organizations or those who are self employed or owners of businesses can also experience problems with the errors and omissions laws that can cause distressing situations in the course of the commercial activity. The same insurance companies who provide business insurance cover handle the personal insurances needed by the individuals or professional bodies. This type of cover is appropriately called professional liability insurance for coverage of problems related to unpredicted litigation due to errors or omissions. This also covers the malpractice complaints and legal suits that commonly arise with medical and other professional practices. The insurance cover is a must for all professionals in any field as it will allow you to work confidently in your chosen line and yet exercise restraint and ethics with minimum risks of E&O that are really a part and parcel of our daily business life. This type of cover is extremely important for every professional in any sphere and must be taken for a comfortable practice of one's profession.

For more information on business liability insurance and professional liability insurance, visit our website

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Article Source: http://EzineArticles.com/?expert=Lousie_Smith

Update July 28 - 2010 All About "Professional Errors and Omissions Insurance" Information By Insurance Experts

Professional Errors and Omissions Insurance is a type of errors and omissions insurance protects business professionals whose clients could claim damages as a result of the business professionals' faulty performance. The faulty performance may be because of a negligent act, error, or omission by the professional.
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Errors and Omissions Insurance
By Matheson Thumgard


Almost every business in the world can benefit from the use of errors and omissions insurance. If you are running a business, then you are liable for the types of benefits and damages your customers receive from your services. Customers have a right to file lawsuits against your company if they ever face damages resulting from an interaction with your business. For this reason, if you want to avoid legal liabilities that can destroy your business, then you should be interested in purchasing this type of insurance to keep yourself safe.
Mishaps can occur practically anywhere and at anytime. This is why you should always be prepared with your business. If an accident does occur in your business, and your customer wants to recoup the damages they incurred from your business, then you may face legal issues that can cost you large amounts of money, and in some cases your assets. For this reason, you need to protect your yourself, your business, and your family to make sure you are running your operations in the most secure way possible.
There really is no limit to the amount of damage that a business could accidentally cause to a customer. This is why there is also no limit to the amount of damage your business could face from a potential lawsuit. This is why errors and omissions insurance is so important. No matter what events occur relating to your business, the insurance company can cover the costs of legal fees and keep your assets safe.
The damages professionals were once facing from lawsuits of this kind became such a nuisance for businesses that some parts of the world actually mandated this type of insurance for companies to remain in operations. Anyone who protects themselves with this type of insurance can sleep at night knowing that their money is safe and sound.
This insurance is also important to your customers. If you do not have this type of insurance, customers may have no way of recouping the losses they face from interacting with your business. If you provide faulty products and services to a customer when you have this insurance though, clients can easily recoup the damage they incur from their relationship with your company.
Many people buy this type of insurance to keep their business and their family safe from misfortune. Other businesses find that their customers feel safer when interacting with a company that purchases this insurance to back up their products and services. Whatever your reason is for buying this insurance, you will know that you will be safe under any circumstances you may face.
With E & O insurance coverage, your company has protection against the services you provide causing financial damage to your customers. You can request an errors and omissions insurance, or professional liability insurance quote online to see what this coverage will not only cost, but how it can help your business.

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Update July 10 - 2010 All About "Professional Errors and Omissions Insurance" Information By Insurance Experts

Professional Errors and Omissions Insurance is a type of errors and omissions insurance protects business professionals whose clients could claim damages as a result of the business professionals' faulty performance. The faulty performance may be because of a negligent act, error, or omission by the professional.

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Lapsing E&O Insurance Coverage - How to Keep Continuous Liability Insurance Coverage

By Jim Cochran

If you've decided to purchase professional liability insurance, you know the value of protecting your business against claims of professional negligence. But it's also critically important to understand the reasons why, as long as you're in business, you should never let your policy lapse.

Claims Made Vs. Occurrence Insurance Policies

Also known as errors and omissions insurance or E&O insurance, professional liability coverage comes into play when and if a client should allege that you or someone you employ made an error or omission in the course of doing your job, causing the client a financial loss. In such cases, E&O claims insurance would pay for your legal defense as well as any settlement the court orders you to pay as compensation to your client, for any covered claims up to the limits specified by your policy.

Professional liability policies are nearly always written on a claims-made basis rather than an occurrence basis. What this means is that coverage depends on two factors: when the alleged omission or error occurred, and when the lawsuit is brought.

Retroactive Date of Inception

The most important dates to keep in mind are your policy's termination date and its retroactive date of inception. What is a retroactive date of inception? Also called a "prior acts coverage date," your retroactive coverage date (a.k.a. retro date) establishes exactly when your coverage begins. In most cases, this date will be the date you first bought your policy. Some comprehensive E&O insurance plans also offer prior acts coverage, in which cases your retro date may be a date prior to your policy purchase.

For a claim to be covered, the alleged error or omission must be covered by the policy and must have taken place on or after the retroactive date of coverage, but before the policy's expiration date; and the claim must be made while the policy is still in force. The claim must also be reported to the insurance carrier within the time frame stipulated by the policy.

So, let's say you bought your errors & omissions coverage June 1, 2008, and that's your retroactive date of inception. Any claims related to errors and omissions you may have made prior to that date aren't covered. Your policy's termination date was May 31, 2009, but you renewed it to maintain continuous coverage. Your renewal date was June 1, 2009, so your new termination date is May 31, 2010 - but your retroactive date of inception is still June 1, 2008. Any covered claims related to work between June 1, 2008, and May 31, 2010, would be covered - as long as they are made and reported to your carrier while your policy is still in force.

But what happens if you choose not to renew your E&O policy? Let's say a client hires you to do a project, but stipulates in the contract that you must purchase E&O insurance for your business. When the contract job is complete, you let the insurance policy lapse because you think it's no longer needed. Months later, your client slaps you with a lawsuit alleging that it was able to trace the cause of a financial loss back to a mistake you made while working on the project. Because your E&O insurance policy is no longer in force, you have no coverage for that lawsuit - even though the policy was active when the error was made.

Regardless of what your retroactive coverage date is, if you let your claims-made policy lapse, your coverage for prior acts is gone. You could lose coverage for years of work. Coverage starts all over again, with a new retro date, on the day your policy is reinstated.

Tail Coverage

Does this mean that you'll need to pay premiums to continue your professional liability policy indefinitely, even if you retire or decide to close your business?

In such cases, you can purchase coverage for an extended reporting period beyond your policy's expiration date, allowing continuous coverage for any claims that may be brought after your business has ceased. This extension, known as "tail coverage," typically lasts from one to five years.

Tail coverage only includes claims related to errors and omissions that took place after your retroactive coverage date of inception and while your business was operational; it doesn't cover claims related to work you may do after your business has closed.

Costs for tail insurance coverage vary, as can the amount of time coverage is extended, so ask your agent or broker for details.

Jim Cochran is the owner of TechInsurance, an online provider of errors and omissions insurance. His company provides professional liability insurance quotes to thousands of IT-related businesses, making him the one of the top providers of IT Insurance in the United States.

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Update June 20 - 2010 All About "Professional Errors and Omissions Insurance" Information By Insurance Experts

Professional Errors and Omissions Insurance is a type of errors and omissions insurance protects business professionals whose clients could claim damages as a result of the business professionals' faulty performance. The faulty performance may be because of a negligent act, error, or omission by the professional.

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Errors and Omissions Insurance - A Professional Necessity

By Jeff Dixon

A profession may be lucrative enough but it can also be the cause of unexpected expenses. This usually happens when mistakes occur in the giving of one's professional service. Even with the education and training, a professional may still commit errors that can lead to damage claims. After all, human beings are always prone to commit errors and omissions. Unfortunately, such monetary demands may be too big it can push someone to the brink of bankruptcy.

No matter how skilled a professional is, mistakes can never be totally avoided. These are like ghosts that will always haunt one even as he tries to focus on executing his job. Since it cannot be completely avoided, the best measure to be taken is to prepare for possible expenses that will be incurred in such cases. Being insured under an errors and omissions policy is necessary.

This type of insurance is a guarantee that there is always enough money needed to satisfy damage claims. For example, doctors who may face suits because of malpractice may not worry about the consequential expenses if they have already prepared money for such events. Even insurance underwriters may need to be covered with it too. Some minor mistakes can be enough cause for litigation, which can cost a lot of money.

Real estate appraisers are definitely just as prone to commit human errors. Any wrongful appraisal that can result in harm to the financial conditions of others may require remuneration. If one is already safeguarded with errors and omissions insurance, so he won't have to worry where he will find money for the repayment. All that he needs to do is to ask his insurance provider to give him the necessary funds for the said purpose.

The most common use of this type of insurance is for defense claims. Oftentimes, when a client becomes a victim of professional malpractice, his only way to get back his money and reputation is by seeking the protections of the laws to achieve both. Therefore, he may file cases against the professional whom he has an issue with. The professional may want to negotiate with the client first but he will still be required to pay for the claims. Otherwise, he will need money too in order to defend himself in court.

Obviously, the best time to buy errors and omissions insurance is before the practice of a profession is made. Costly mistakes can occur very early in a career. With such safeguard early in place, then these can certainly be covered already. However, this is not an excuse to commit errors again. Otherwise, the worse harm on one's name is made. This is something that cannot be repaired by insurance policies of any kind.

Protect yourself from Errors and Omissions mistakes with the right insurance. With the right protection you work without worry from unintentional mistakes.

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Update May 31 - 2010 All About "Professional Errors and Omissions Insurance" Information By Insurance Experts

Professional Errors and Omissions Insurance is a type of errors and omissions insurance protects business professionals whose clients could claim damages as a result of the business professionals' faulty performance. The faulty performance may be because of a negligent act, error, or omission by the professional.

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Foreclosure Cleanup - E&O Insurance Vs Liability & How to Determine Which You Need in Your Business

By Cassandra Black

Some foreclosure cleanup companies are saying they are being asked for proof of Errors & Omissions insurance by larger contractors before they can act as a subcontractor.

Here is a query received from a foreclosure cleanup business colleague just recently:

QUESTION: I have talked to my insurance agent, and if I am only doing trashouts, interior cleaning, and lawn maintenance, why are some of these large asset companies requiring me to have errors and omissions insurance?

E&O Insurance vs. General Liability

Below is a detailed explanation of E&O versus General Liability Insurance so you are knowledgeable about insurance as it relates to the industry as you prepare to grow your business. You'll be surprised at how often you'll know more than the person on the other end of the phone line seeking to give you work orders. This knowledge can help you land foreclosure cleanup jobs going forward because the person will immediately form a positive impression of your company.

Gist of E&O Insurance

Errors & Omissions insurance ("E&O"), also referred to as professional liability, is a form of business liability insurance for professionals such as Realtors, brokers, insurance agents, architects, third party-type administrators and other business professionals. (Think malpractice insurance.) Its premise? To cover errors (mistakes) or omissions that lead to financial harm to another, which can really occur on almost any transaction in any profession.

E&O aids in protecting the professional or company from bearing the full cost of lawsuits (the defense) relating to the error, mistake or omission while providing the professional service. E&O does not replace liability; it is a separate coverage from a standard general liability policy.

Generally, foreclosure cleanup companies do NOT need Errors and Omissions insurance; but confusion arises (often in-house at property preservation companies) because the exact same vendor sign-up application used for Realtors, brokers, and similar professionals working for property preservation companies is often used for foreclosure cleanup service companies working for property preservation companies.

On that vendor application, there is indeed an area for Realtors and brokers to provide proof of E&O insurance -- and the E&O coverage requirement is the industry norm for Realtors and brokers.

What is General Liability Insurance?

Coverage under general liability insurance primarily includes claims against bodily, personal, and advertising injury, as well as property damage. Advertising injury covers damage from slander or false advertising. Liability insurance generally provides asset protection for a business when it's sued for something that causes injury or property damage. The insurer pays the legal tab of a business in a covered liability claim or lawsuit under a general liability policy.

Comparison

Just remember that E&O is really insurance to protect you and your business in the event a client alleges they've suffered a financial loss as a result of an error or an omission committed by you in the delivery of your professional services, whereas General Liability is designed to provide coverage to you for primarily bodily injury, advertising, or property damage liability.

Query the Company Asking You for E&O

If a property preservation company or larger contractor asks you to provide proof of E&O, please query them to be certain they really want your type of company to produce that type of insurance. Let them know you are a foreclosure cleanup company seeking to work with them on a subcontracting basis as a foreclosure cleaning service provider -- NOT as a Realtor or broker.

Impress upon them that you, of course, have the required general liability coverage and can provide proof so you can move forward registering as a subcontractor with their company.

Continued success in your foreclosure cleaning business!

Cassandra Black is the Author of How to Start a Foreclosure Cleanup Business: FREE Articles & Advice Blog and How to Start a Foreclosure Cleanup Business eBook

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Update May 11 - 2010 All About "Professional Errors and Omissions Insurance" Information By Insurance Experts

Professional Errors and Omissions Insurance is a type of errors and omissions insurance protects business professionals whose clients could claim damages as a result of the business professionals' faulty performance. The faulty performance may be because of a negligent act, error, or omission by the professional.

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IT Project Managers' Guide to Errors and Omissions Insurance

By James Cochran

One of the most important insurance coverages for any small business - and especially for independent IT project managers - is errors and omissions (E&O) coverage. Many small technology companies are not sure what it covers and how it differs from other types of insurance policies.

Here are answers to some of the most common questions that IT Project Mangers ask about E&O insurance:

What's the difference between professional liability and errors and omissions insurance?

"Professional liability insurance" and "errors and omissions insurance" are essentially different terms for the same type of insurance, which protects your business in the event that a client alleges that you or one of your employees made a mistake while providing IT services, causing that client to suffer a financial loss.

What's the difference between E&O insurance and general liability insurance?

While E&O coverage (also known as professional liability insurance) covers you for errors you may make while doing your job, general liability insurance responds to claims of bodily injury or property damage. For example, you or one of your employees injures someone or damages property at the client's location, or someone comes into your office and slips and falls. General liability is often required by contracts because clients will often want to make sure that any business providing services on their premises carries general liability insurance, whether it is a plumbing contractor or an IT contractor.

A Business Owner's Policy, also known as a BOP, includes both general liability insurance and property insurance. The property insurance portion of a BOP protects your business property (at your location or at a client site) against physical loss or damage by theft or fire, for example. A BOP is an excellent choice for many solo practitioners and small businesses.

Client contracts may require that IT project managers carry both professional and general liability coverage. While you can purchase general liability and property policies separately, buying them together in a BOP is generally more cost-effective and is an easy way to get more-complete coverage for the needs of most small IT businesses.

But doesn't general liability insurance already include errors and omissions coverage?

No. General liability doesn't protect your company in the event that a client should sue you for a mistake you make in the course of doing your work. General liability does cover bodily injury and property damage claims, but typically excludes litigation involving professional negligence or charges of failing to perform professional duties. For that, you need a separate professional liability insurance policy.

So, what kinds of risks does E&O insurance cover?

E&O coverage is triggered when your client alleges that you or one of your employees made a mistake in the course of providing IT services or IT project management services. For an IT project manager, a client could claim that you're responsible for a software design error that results in a system that does not perform as intended, or even for a project that takes longer than anticipated, causing costs to escalate or causing the client to lose business.

Of course, some types of business disputes are simply uninsurable, such as if the client fails to pay a bill or someone sues you for stealing a customer. That's why it's important to understand exactly what your E&O policy does cover, so that you can avoid these types of risks or employ legal contracts to cover them. It is also important to remember that E&O insurance is designed to defend you and pay legitimate demands for financial compensation from a client. An E&O policy will not reimburse you or compensate you for your internal costs to correct a problem.

I don't plan on making any mistakes that will get me sued. Do I really need E&O coverage?

The odds that you will be sued are statistically low. However, most business owners eventually reach a point where the risk of going without E&O insurance doesn't justify the savings. In a typical IT project, are there elements beyond your control? What happens if a subcontractor misrepresents their abilities and derails a project? If a developer makes an error in a line of code that causes the client to lose money? If the backup strategy you so carefully designed falls through due to human error, and important data are lost? If the contract is in your name, you're the one who will be held responsible.

The fact is, you don't have to make a mistake to get sued. Any client can sue you at any time, and regardless of whether that suit has merit, you'll have to pay for a legal defense. Nearly everyone has had a client that is difficult, even unreasonable. When you're blindsided by a lawsuit and don't have the money in your budget to defend yourself, it can threaten your ability to stay in business. Even when you do your best work, other variables can affect the risk.

How much does it cost?

The cost of E&O insurance will vary depending on your company's revenues and location, as well as the limits of liability and deductible you choose. Most one- or two-person firms can get $1 million in E&O insurance for around $1,000 per year. For most independent IT project managers, that is less than 1 percent of gross revenue, and the peace of mind that maintaining E&O insurance brings is often well worth it.

If you're not sure it is time to protect your technology business with E&O insurance, it doesn't cost anything to talk to an insurance broker to learn what your options are before you make a decision. Contact a technology insurance agent for a specialized quote.

Jim Cochran is the President of TechInsurance; a web based professional liability insurance company. For years Jim has been providing errors and omissions insurance quotes to IT project managers and small business alike. Jim's industry knowledge makes him a valuable resource when it comes to planning projects and obtaining liability coverage.

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