Errors And Omissions Insurance, Do You Need It?

Errors and omissions and other similar liability policies created for professionals can be vitally important for professionals whether they are low profile licensees or high profile professionals. At one time, only medical doctors and other high profile professionals needed to cover their rears with malpractice insurance and other similar policies.

Today architects, animal doctors, nurses and insurance agents are being taken to court for their negligence. Not having a policy that can protect you against lawsuits can mean that your career is over and that your home is sold to pay damages.

Being negligent can start with something very small that snowballs into something catastrophic. You might inadvertently discard a page from a client's file or shred a vital piece of paper. This might cause you to give a client bad advice or miss a deadline.

Nobody can make the right decision every single time. Having a policy that covers you, for the human error that we are all subject to, can save your financial life.

What is errors and omissions insurance? It is similar to a doctor's malpractice insurance. It protects you the professional when someone alleges that you have made a professional mistake that hurt them.

It important to know that professional liability is not covered by a general liability insurance policy. So even if you have protected yourself with a general liability policy, you still have exposure to the risks that are part and parcel to your profession.

What is not covered by errors & omissions? These policies are not designed to cover anyone for criminal acts. They will not cover anyone for acts that are dishonest or fraudulent.

Neither general liability insurance nor professional liability insurance is designed to cover dishonest or fraudulent acts. They are designed to protect you from honest mistakes.

An honest mistake shouldn’t ruin your career or evaporate your life savings. Errors & omissions coverage is designed to cover inadvertent mistakes and allow you to continue on with your career.

An E and O policy is, however, likely to cover you if you are taken to court due to a mistake you have made in your business or profession that is unintentional. Just as important is the fact an errors and omissions policy will cover you when you haven't made an inadvertent omission or mistake, but someone is still taking you to court.

Each generation tends go get more litigious. Professionals are being sued now at a rate that was unthinkable a ten or twenty years ago. If you think that you are in a profession that makes a costly possibility, you are probably correct.

There doesn't appear to be any limits to what a professional can be taken to court for. Sometimes the lawsuits have merit. Sometimes the suits have no basis, but being sued can be costly whether or not you have made even the smallest mistake.

If you are sued, you will probably find that your E & O insurance carrier will pay all of your legal defense. The legal fees will not be deducted from the amount your company might pay to the party suing you. This can mean a savings of a boat load of money. Being taken to court can be costly even if you are not guilty of a professional error.

If your profession puts you in a position of trust and a high standard of conduct is expected of you and other members of your profession you may need an E and O policy whether or not your employer mandates it.

The number of lawsuits filed against professionals tends to increase during recessionary times. Clients who are out of work are more likely to sue. Failing to properly insure yourself before you are hit with a lawsuit might mean the end of your career and any nest egg that you have saved.