Errors and Omissions Insurance is For Businesses That Provide a Service
By Caressa Waechter
In our current society, numerous company owners have errors and omissions (E&O) insurance. This is fitting for any person who provides guidance, makes well-informed advices, creates answers or stands for other people's needs like inspectors, telecommunications carriers, advertisement copywriters, placement services, web page designers, software developers, consultants and teachers.
If you are in a service business, this type of coverage is needed. Your client may complain that the service which he availed from you made him spend a certain amount of money or resulted to a particular damage.
Companies commit errors every once in a while and it is unavoidable. This is where E&O insurance comes in. It covers both your mistakes and the ones made by your freelance outworkers and employees. In addition, you could be free from any humiliation, customers backing off and ruined reputation.
An official agreement with the customer can reduce your liability, but the major price you pay when sued for something covered by these policies is the legal defense which is required to confirm innocence or liability. These policies are created to protect most of these costs and eventually the closing decision if the company owner failed to succeed in the defense.
It is normally suggested that E&O coverage be the basis of any insurance portfolio of businesses. Typically, it is sensible to buy the plan before the launch of a product or when you already have clients.
Professionals who require this type of plan include engineers, lawyers, doctors, architects, accountants and others. If your business offers and charges for services to customers, you have exposure to errors & omissions. You may want take into account the repercussions of a service not done appropriately or in a timely manner, and it causes your client to lose money or ruins their reputation.
Errors and omissions rates very much differ as it depends on the business type, place and experience in claims. An insurance firm considered as being aggressive on insurance or property coverage may be an opposite or incapable of providing this type of coverage since it isn't their specialty.
As a business that provides a service to your customers, you probably need errors and omissions insurance. Also known as professional liability insurance, this coverage should be considered mandatory for certain business types.
Article Source: http://EzineArticles.com/?expert=Caressa_Waechter
Beware of Errors and Omissions Insurance
By George G Williams
If you are providing an insurance service you must consider the risk of being brought into court for a real, or not so real, lawsuit. Many professionals require specific E and O insurance geared to their particular industry. It all depends upon upon the industry, the state, size and of course, the history of the company. Any number of professional liability options are available. The company you select should maintain strong relationships with many carriers that can custom tailor a program for your organization. Brokers who maintain licenses and have relationships with brokers in all 50 states is your best bet.
Policies are issued on a Miscellaneous Professional Liability (MPL) form, which are often used by many E and Omissions companies. Often changes are required on these forms. Without changes, many policies are just plain inadequate to cover the typical risks of operating a business. Many times one will see excluded medical management, accounting or actuarial services, merger and acquisition services. For many business that may be sufficient, however, for a medical group to have medical management excluded from their policy would provide no coverage for their actual day to day activities..! Until there Gaps like this are unknown until there is a claim. Policies ust be specific to each company, and offer a "gapless" solution for each client. Example - An accounting firm. After taking a look at their E & O policy, it was determined that their policy specifically excluded accounting services. What?!? This sort of gap happens more times than one would like to see. It's buyer beware..!
George Williams
http://www.eandoinsuranceofamerica.com
Article Source: http://EzineArticles.com/?expert=George_G_Williams
Errors and Omissions Insurance - A Vital Component in Protecting Against the Unexpected
By James Cochran
Many business owners have taken proper steps to insure against property loss and injury claims, the more traditional forms of commercial insurance coverage. However, they may have overlooked protecting themselves against claims of professional negligence.
Errors and Omissions (E&O) insurance, also known as Professional Liability insurance, protects organizations or individuals against claims of financial loss due to negligence in the delivery of professional services. Professional liability related to errors or omissions, whether actual or merely perceived are not covered by General Liability insurance. (General Liability essentially covers claims of bodily injury or property damage.)
As the business climate grows more complex, so do the insurance needs of business owners, regardless of whether they employ hundreds of consultants or operate as a sole proprietorship out of their home. Errors and omissions insurance coverage is critical and it protects businesses in two vital areas: legal defense fees and settlement expenses.
Most E&O policies will cover defense costs, which, even if the allegations are found invalid, can cost tens of thousands of dollars. For many small businesses and individuals, high legal defense costs could lead to serious financial strain or even bankruptcy.
Who's at risk?
Professionals who most commonly need E&O insurance include doctors, lawyers, engineers and consultants. However, there are a handful of businesses in which E&O coverage is often overlooked, these include advertising agencies, Web hosting companies, service providers, Web and graphic designers, and other Internet-based service companies. Nearly every organization that provides a professional service to a client for a fee has E&O exposure, and because professional requirements are typically undefined in legal terms, Professional Liability insurance shields businesses from the unforeseen.
In some cases, subcontractors may be required by the client to provide proof of General and Professional Liability insurance. Any business that provides specialized service or performs work on a project that is critically important to the client's business, will want to insure themselves against E&O claims. This risk opens the contracted business to potential litigation. If a client perceives a task was not carried out as promised, they can file claims on several issues, including:
* Software or system failures that cause a client to lose profits
* Failure to perform duties
* Loss of client data
* Copyright infringement on Web site and software development
* Failure to meet pre-determined benchmarks on specific projects
While quality control can reduce the risk of errors and omissions, no company has complete immunity to it. Even with the best and brightest employees serving on the frontline, mistakes will happen and if the client feels the service was not completed as promised, if it costs the client money, or damages their reputation, then the company could be at risk of E&O litigation.
Ensuring the policy meets the company's needs
Costs for errors and omissions insurance coverage vary significantly. Many factors are taken into account such as, the type of business, the type of services provided, the location, claim history, and size of the business. The competition among insurance providers, however, works to the business owner's advantage, and the process for receiving an E&O insurance quote, cost comparison and detailed policy information should be fairly simple.
While the process will vary, some insurance company underwriters will ask for copies of contracts and descriptions of quality control procedures, while other underwriters may simply request an application be completed. When searching for an E&O insurance quote or reviewing a policy there are several key features to be mindful of:
* Coverage should include legal defense costs.
* Both W2 employees and 1099 subcontractors should be covered - the company should be protected against claims from work performed by 1099 subcontractors on the company's behalf. In many cases, however, 1099 personnel are not covered and would need their own errors and omissions insurance coverage.
* Optional coverage for allegations of copyright and intellectual property infringement - this protects the company from claims alleging copyright infraction. Intellectual property infringement coverage is particularly important for software, systems or processes, as they are the most widely known "intellectual properties."
* Personal injury coverage such as claims of libel, slander and invasion of privacy
* Worldwide coverage - this covers incidents regardless of where they originate.
Defending a claim
In the event a claim is filed, E&O insurance will adequately prepare the company to defend its case. It will pay for a strong legal defense and potentially save a small business or individual from severe debt. Unfortunately, laws and legal precedents that govern the technology industry are still under development, which often puts IT professionals in unknown legal territory.
However, while mistakes are bound to happen, there are a few steps businesses can take to mitigate claims:
* Have a written contract detailing what service will be provided, what is not included and the fees for delivering that service
* Communicate throughout the entire job; give the client realistic expectations upfront and provide regular status updates
* Implement quality control procedures, and regularly conduct audits to ensure the procedures are being adequately executed
Once the contract is written, be sure it contains very specific information, including:
* Limits of liability - the dollar amount per occurrence of liability
* A section detailing the services the company will be providing
A written contract is one way businesses and individuals can protect themselves, however E&O insurance will provide an extra layer of protection against the unknown and unexpected. Defending a claim is costly and time consuming. Regardless of whether a suit is deemed unreasonable, attorney fees will still need to be paid. In some instances, costs for defending a case can exceed the cost of a resulting settlement. E&O insurance covers attorney fees, any settlement costs that may result, and allows the business owner to continue operating without fear of potentially having to face bankruptcy or a mountain of debt.
James Cochran is the founder of Techinsurance. Since 1997, Techihsurance.com has been providing high quality professional liability insurance at a reasonable price to IT firms across the nation. They quickly became a leader in providing business liability insurance, and have since maintained their position as one of the top IT business insurance providers.
Article Source: http://EzineArticles.com/?expert=James_Cochran
Errors & Omissions Insurance for Graphic Designers: The Increasing Importance of This Coverage
By Ryan Mitchell
Do you think your commercial general liability (CGL) insurance policy will protect you from lawsuits alleging the failure of your product to perform or your failure to provide services to specifications…if so, you better think again. A general liability policy does not protect you from these exposures and as a result, you may have a gap in your liability insurance protection. This is why Errors & Omissions insurance, also known as Professional Liability and E&O for short, should be an integral part of a Graphic Designers liability insurance program.
Graphic Designers have two areas of exposure. The first is a media exposure from the designing and branding of a companies name and logo. These services give way to potential copyright and patent infringement claims. The second is a technology exposure from the designing and implementation of a web site.
The failure of many graphic designers to obtain E&O insurance reflects both a misunderstanding of the scope of protection offered and a “won’t happen to me” attitude concerning the potential risk of being sued. This insurance not only provides coverage for any damages that may be awarded but it also covers the defense costs associated with the claim.
Errors & Omissions liability claims alleging the failure to render professional services against graphic design firms are escalating. E&O liability provides coverage for claims with or without merit.
The good news is that protection is available and the cost of this insurance is becoming more affordable. There are now packages available for companies that offer a multitude of media services. Don't let your company go without this coverage.
Ryan Mitchell is a Professional Insurance Broker in Toronto, Canada. To learn more, please visit http://www.mitchellsandham.com
Article Source: http://EzineArticles.com/?expert=Ryan_Mitchell
Professional Liability Insurance For Therapists
By Michael Maitland
The profession of therapy demands personal interaction with people on a day-to-day basis and therapists face situations daily where you are open to the possibility of charges of wrongdoing. Your clients could hold you responsible for damages they have received, resulting from an alleged negligent act, error, omission or malpractice arising out of your professional capacity as a therapist.
In the unfortunate event that such an allegation is made, a Professional Liability policy will provide coverage for defense costs and expenses and any subsequent damages awards making this type of insurance essential for all healthcare professionals.
For those therapists that are employed by a Healthcare Service provider, the Professional Liability coverage placed by their employers will provide coverage for those incidents arising while the therapist is acting within the scope of their duties performed on behalf of the employing entity.
In addition to the coverage provided by an employers Professional Liability policy, it is also advisable for Therapists to consider purchasing an individual Professional Liability policy for the following reasons:
Do I have enough coverage?
Today's astronomical malpractice awards can quickly exceed coverage limits. If you, as an individual, are named in a malpractice lawsuit and your legal costs and settlement or judgment exceeds the limits under your employer's policy, you may be required to make up the difference. An individual policy will provide additional coverage up to the limits selected (typically $1,000,000 per claim / $3,000,000 annual aggregate).
Am I covered when I am off-duty?
Many policies cover you only when you're working. That means you could be financially liable for contract work performed after hours, Good Samaritan assistance, volunteer activities or even casual advice to a friend or neighbor. Individual policies usually provide protection to you 24 hours a day, 365 days a year.
Is my coverage shared with others?
If you're covered by an employer's policy, your liability limits may be shared by other defendants. Shared limits decrease your individual protection and increase your personal financial liability. Even worse, in some states you could be found liable for the financial responsibility of others. An individual Professional Liability policy provides 100% personal protection with no shared limits.
Does your employer-provided insurance include license protection?
In addition to being named in a malpractice lawsuit, one of the most serious risks that healthcare professionals face is the suspension or withdrawal of their license - without which you lose your ability to work. Employers rarely provide license protection, and in fact, may even be the source of the complaint. An individual policy will usually provide coverage for your defense of disciplinary charges arising out of covered medical or non-medical incidents.
To illustrate how therapists can be vulnerable to Professional Liability claims, the following is a summary of a recent claim filed alleging a negligent act, error or omission against a physical therapist:
Richey v. Turocy
The lawsuit was brought against the hospital, defendant orthopedic surgeon and the physical therapist. The plaintiff alleged that the defendant's physical therapy treatment caused a subsequent heart attack. The defendant hospital maintained that the defendant physical therapist was experienced, properly trained and should not be expected to make a referral outside the scope of the therapy. The verdict was rendered in favor of all defendants.
Reduce Your Risk with this Liability Checklist
As you begin each workday, your main goal is to provide the best possible care to your patients. But in this litigious society, you also have to make sure that none of your actions leave you vulnerable to a lawsuit. A quick reference of basic risk management guidelines may help to ease your concerns and no matter what field you work in, these basic tips can go a long way toward keeping you from being sued.
Know your job
Always ask yourself if the care you're about to give is within your scope of practice. If you have any doubts, consult your employer. Your employer has written standards of practice, based on your State practice act, your professional organization's guidelines, and your facility's policies and procedures.
Stay up-to-date.
Be sure you're competent to perform your job. Keep your certification current. Make sure you receive timely, adequate training on new equipment and never use equipment you haven't been trained on. If you feel your skills are insufficient in a particular area, ask about additional training.
Maintain your professionalism.
A patient is less likely to sue a healthcare provider she likes, so be sure to act professionally. Always treat the patient with respect. If possible, speak to her directly and maintain eye contact. Listen attentively and don't interrupt. Ask the patient if she has any questions: If her concerns fall outside of your scope of practice, contact the appropriate healthcare provider to come and see the patient.
Document, document, document.
It's become a risk management cliche, but it's true: If you didn't document it, you didn't do it. If you fail to write down that you did a thorough assessment or provided the patient with a particular treatment, it could become your word against hers in a lawsuit. Be sure to document the status of the patient before and after treatment, how receptive she was to patient education, and your response to any concerns she had.
Chart any telephone conversations you have with the patient, family, or other healthcare professionals about the case. Document, too, any time the patient cancels treatment or fails to keep an appointment. If she repeatedly misses appointments, make a notation of your attempts to contact her to discuss the problem. Make sure all of your entries in the patient's chart are legible and easy to comprehend.
Protect patient confidentiality.
Discuss the patient's care only with the appropriate personnel. Never talk about a patient in a public place, such as an elevator or cafeteria. If you have to fax patient information, make sure the recipient is standing by to receive the transmission so no one else reads it.
Article Source: http://EzineArticles.com/?expert=Michael_Maitland |
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