Errors and Omission Insurance Coverage
By Caressa Waechter
Business professionals such as real estate agents require errors and omissions insurance to protect them from paying full law costs when a possible lawsuit arises due to an error or omission in the services they provided. This insurance is separate from general liability or property insurance.
Errors and omissions insurance may be referred to as E & O or malpractice insurance. It may be referred as this for doctors, dentist or chiropractors. Errors and omissions insurance should be purchased when a business is first started and included in their insurance portfolio.
There is no standard for E & O insurance. Each practice is different and will require different insurance needs. An insurance company underwriter will assess the practice and what work is undertaken at the premises and supply a policy that will cover all the practice's needs. These policies are written on a claims made and reported form, meaning that any claims must be made and reported within the time of the policy. Claims that arise out of the policy date will not be covered.
When applying for a policy an insurance underwriter may want to view the businesses quality control procedures, documentation practices and training procedures and if you have had any previous claims.
The cost of E & O insurance varies greatly from company to company. E & O insurance will cover a company through judgments, settlements and defense cost and will possibly save a company thousands of dollars, even if the case is deemed groundless.
Once E & O insurance has been agreed upon, the business needs to keep running at a reputable level, having this insurance does not mean that the business should start doing procedures or performing tasks that could possible lead to a malpractice suit. This insurance is to protect from the unexpected incident or mistake that may arise.
If you are a professional that works for clients, then you probably need to be carrying E&O insurance. Also know as professional liability insurance, this type of insurance is pretty much mandatory for certain occupations.
Article Source: http://EzineArticles.com/?expert=Caressa_Waechter
Management Consultant Insurance and Liability Protection
By James Cochran
If you're in the management consulting business, you probably have clients that require you to carry some level of insurance. Maybe you run a small firm with a few employees, or maybe you're an independent freelancer. Either way, you might wonder if you'll ever actually use all that coverage.
If your client says it's necessary, you will need to obtain professional liability insurance if you want to secure the job. The good news is that getting the required insurance coverage can be both affordable and good for your business.
Typically, companies want their management consultants to carry some or all of the following three types of coverage:
General liability insurance
General liability insurance covers businesses in the event of an on-site injury or damage to company property. Management consultants often wonder whether they really need this type of coverage. After all, what's the likelihood that someone giving a presentation or attending a meeting will damage a client's property or hurt anyone? Is there really a risk of liability for management consultants?
The fact is, client companies often require all of their vendors who may come on-site - from electricians to delivery personnel to management consultants - to prove they carry general liability insurance. In some cases, the mandate comes from the client's investors, who seek to reduce the company's risk of financial losses from lawsuits. And of course, accidents do happen, so there is as much risk of liability for management consultants as for any other office visitor.
If you have your own management consulting office, general liability insurance will protect you in the event of an accident or injury on the premises. If a client visits your office on a rainy day and slips and falls in the entryway, your general liability insurance will cover any related medical or legal costs - and possibly save your client relationship. And that's one invaluable reason why insurance for management consultants is good for your business.
Professional liability insurance
Professional liability insurance, also known as errors and omissions or E&O insurance, is essentially malpractice insurance for management consultants. It covers you for errors and omissions that you or your employees make on the job. There's a simple reason that clients require E&O insurance for management consultants: They know that people make mistakes.
Your client's greatest risk in bringing you in as a management consultant is liability -- the fact that your mistakes could spark a lawsuit or financial loss. For example, let's say you have revamped a company's budgeting process, but made a critical miscalculation in the new system that results in big problems when the budget is reconciled with actual expenses later in the year. Your client can claim that any resulting financial loss is due to a management consultant error or omission, and will expect you to compensate the company.
Having professional liability or E&O insurance for management consultants is a good idea. Without it, you could end up paying exorbitant legal defense costs if your client makes a claim against you. A misunderstanding is often all it takes to be served with a lawsuit. Once a client alleges that you were negligent and communication breaks down, your legal expenses start to grow. E&O insurance gives you peace of mind that should things go wrong, you're covered.
Workers' compensation insurance
Some states require workers' compensation insurance, while others do not. If your client is based in a state that requires it, your management consulting firm will likely be asked to carry it, even if your own home state does not require it.
That's because, in some states, if you're injured while on the job, your client must cover you with its own workers' compensation policy. Also, in some states, your client's insurance carrier will require the client to cover all contractors that don't have their own proof of coverage. Both scenarios increase your clients' premiums, so they often require workers' comp insurance of management consultants as well as other contractors.
Workers' compensation insurance covers medical expenses as well as disability and compensation in the event of on-the-job injuries. If you're a solo practitioner with your own health insurance, workers' compensation insurance may not be necessary - but your client may still require it if you want to get the work.
If your management consulting business has employees, protecting them with workers' compensation insurance just makes good business sense. From carpal tunnel syndrome to a slippery bathroom floor, even the smallest on-the-job hazards could result in an injury that could take them off the job. Workers' compensation insurance ensures that your employees are taken care of and saves your company from paying for their ongoing care.
About the Author:
In business for over a decade, James Cochran, founder of Business Insurance Now, an insurance company specializing in professional liability insurance, knows the implications and responsibilities of business ownership inside and out. Business Insurance Now offers comprehensive business coverage, including management consultant insurance and more.
Article Source: http://EzineArticles.com/?expert=James_Cochran
Why Should Accountants and Bookkeepers Get Errors and Omissions Insurance?
By James Cochran
A common misconception is that doctors and lawyers are the only professionals in need of Errors and Omissions (E&O) insurance. In fact, nearly every organization that provides a service to a client for a fee has E&O exposure, and because professional requirements are broadly defined in legal terms, Professional Liability insurance shields businesses from the unforeseen.
Errors and Omissions insurance, also known as Professional Liability Insurance, protects organizations or individuals against claims of professional negligence throughout a variety of professional services. This includes errors or omissions that the company actually made or that the client perceives were made. Errors and Omissions claims are not covered by General Liability insurance.
Insurance for Tax Preparers
Errors and Omissions insurance is particularly important for Certified Public Accountants, bookkeepers and tax preparers. Every year, in the U.S., thousands of suits are filed against tax preparers and bookkeepers, and, in the wake of nearly every corporate scandal, new lawsuits arise.
For bookkeepers, tax preparers and accountants, the tax and audit landscape is constantly changing. Clients rely on these professionals to be up-to-date and accurate, but no matter how polished a tax preparer or accountant is, and regardless of how seamless their risk management procedures are, mistakes will happen.
For instance, if a client is audited on their tax return, and there is in fact an error resulting from a simple miscalculation on the tax professional's part, the tax professional would be held responsible for any IRS-assessed penalties and interest the client was charged. Also, if the preparer overlooked or failed to include information provided by the client, they would also be at fault. Even if a client failed to provide a piece of information to the tax professional and then filed a frivolous suit, the tax preparer would still have to pay potentially exorbitant legal fees to defend themselves.
Even the most minor mistakes can cause substantial problems for clients, and without Errors and Omissions insurance for tax preparers, a firm or individual would likely not be able to survive even a single claim brought against it.
Bookkeepers Require Coverage Too!
Likewise, bookkeeper Errors and Omissions coverage would protect the bookkeeper in similar situations where figures might have been miscalculated or information was omitted, regardless of whether or not it was their fault or their client's fault.
History has shown that when a major corporate scandal is uncovered, racketeering lawsuits against accountants typically increase. According to an article published by the Manhattan Institute for Policy Research, during the late 1980s, in the midst of the Securities and Loan debacle, damage claims against accountants were estimated to be between one and four billion dollars - a figure that was purported to exceed the net capital of all accounting firms combined (Lawson & Olson). While some were involved in ill doings, others were reputable professionals. While a litigation onslaught of this magnitude may never be repeated, it is a risk that E&O insurance for accountants will safeguard against.
Most E&O policies will cover judgments, settlements and defense costs, even in cases in which the allegations are found to be frivolous. Without Errors and Omissions Insurance, the cost of paying settlements and court fees would leave many bookkeepers, accountants and tax preparers in extreme debt, or even bankruptcy.
James Cochran is the founder of Business Insurance Now, a company specializing in small business liability insurance. Business Insurance Now also offers professional liability insurance for accountants or those in the consulting industry and workers comp insurance to cover your company's employees.
Article Source: http://EzineArticles.com/?expert=James_Cochran
E&O Insurance For Your Small Business
By David W Judge
Do you own a business which provides a service to your client for a fee? If so, you have an E&O (Errors and Omissions) exposure where your company can be sued for mistakes or omissions that result in financial losses for a client.
Also called "Professional Liability" or "Malpractice" insurance, Errors and Omissions (E&O) insurance should be considered by companies and individuals who work with clients in the areas of consultation, service providers, design or sales.
What is E&O insurance? It is a separate insurance policy that provides your business insurance coverage to cover judgments, settlements and defense costs that can result from errors (or omissions) that you have made or that a client perceives you have made. Even if the allegations are found to be groundless, thousands of dollars may be needed to defend the lawsuit.
Do you need an E&O policy? The most well know professionals who need E&O insurance are doctors, lawyers, accountants, architects, and engineers, etc. However, if you provide a service to your clients for a fee you too have an E&O exposure. There are hundreds of businesses that fall under this category and range from wedding planners to advertising agencies.
Does your general liability policy cover E&O losses? General liability policies do not provide E&O coverage. A general liability policy does not provide coverage for errors, contract performance disputes or any other professional liability issue.
What should you look for in an E&O policy? E&O insurance helps protect you business in two vital areas. The first are attorney fees. Many times the cost to defend an E&O claim is more costly than the settlement itself. Even if you are sued with a frivolous law suit you still have to pay for your legal defense. Most E&O policies provide defense cost for your company up to the coverage limit on your policy.
The second vital area of coverage is to pay the amount of any settlement you would pay if found at fault. Presume that you are a wedding planner and you are to plan a wedding for June 11th but for some reason there is a mix up and you reserve the reception hall, band, caterers etc, for June 4th instead. On June 4th the band, caterers etc. all show up at the reception hall to find no one there, who pays? This is exactly what an E&O policy covers.
E&O policies vary from company to company so you need to make sure that your policy provides adequate coverage for your particular business. Cost for E&O policies also vary greatly depending on the class of business, location, claims experience etc. You should contact your local agent to discuss your business E&O exposures and determine if an E&O policy is right for you.
For more information and to receive an online instant quote for your business go to http://www.QuoteItNow.com
Article Source: http://EzineArticles.com/?expert=David_W_Judge
The Importance of E & O Insurance For Process Servers
By Kathleen Albright
We live in a society which has become litigious while, at the same time, increasingly concerned with privacy rights.
This can be particularly difficult for litigators because not all the facts of a case may be accessible. This leads to the possibility of an error or omission occurrence.
Repercussions due to an error can be extremely costly. This is why a reputable process server will carry errors and omissions insurance. This E&O insurance is also protection for their clients.
It is realistic to expect that sometimes inopportune circumstances occur despite the best risk management strategies. For example, a traffic tie-up or accident may prevent a server from perfecting a rush service on a Defendant by a court ordered deadline. The server's errors and omissions policy will cover any legal action initiated in relation to such occurrences.
As with any professional or business, a a person who serves process is susceptible to frivolous claims that can implicate their clients as well. Errors and omissions insurance will cover defense of such a claim.
The typical amount of insurance carried is $1,000,000 per occurrence. Errors and omissions insurance is especially tailored to take into account the possible liability situations particular to the profession.
Errors and omissions insurance also provides the extra reassurance that the process server is legitimate. Having insurance coverage demonstrates that the individual is organized, responsible and willing to rectify an unfortunate incident.
A professional with errors and omissions coverage is protective of their respectable business name and willing to stand behind their reputation.
This insurance coverage also proves a commitment to their clients. It illustrates a policy of providing the best services possible. It also differentiates credible process servers from "fly by night" operators.
In the unlikely event an unavoidable error or omission occurs, you can have confidence that your professional server's insurance coverage will safeguard you.
Kathleen Albright is the owner of Professional Attorney Services LLC, a private investigative and professional process service agency in Boulder, Colorado. Her services include process serving, skip tracing and background checks. She is dedicated to providing professional, ethical and reliable work to all her clients. If you are looking for a professional Colorado process server, visit Professional Attorney Services, LLC at http://ProfessionalAttorneyServices.com
Thanks for sharing the information error and omission insurance. I was not aware of this kind earlier. I think its beneficial for the businesses that work on large scale.
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