There are various types of Errors and Omissions insurance policies and the right policy for your business model depends largely on the types of services your business provides. The best way to select the correct policy is to work with one of our licensed insurance agents to figure out exactly what policy you need.
That said, consider these five things whenever shopping for an E and O policy:
- Services defined within the policy. Always pay attention to the declarations page of the policy to ensure that all services offered by your business are included that you want to be insured. If a claim needs to be made, your E&O policy will only cover against allegations of wrong doing that are expressly defined within the policy declarations page.
- Understand the difference between a Claims Made policy and an Occurrence policy. Unlike a commercial general liability insurance policy which is considered an occurrence policy, an Errors and Omissions policy is a claims made policy. This means that all claims must be made during the policy period and occur after the retroactive date of the policy. When purchasing E and O insurance, always ask the insurance agent to set the retroactive date as far back as possible to provide additional protection for your business.
- Limits of Liability. Always consider the worst possible case claim scenario when shopping for E and O insurance. A claim should be able to cover the costs of providing adequate defense during a worst case scenario. Consider who your clients are, what type of service your business provides, and what the financial consequences could be. Choose liability limits that fall within this worst case scenario for the best protection against an allegation of wrong doing.
- Common Exclusions. Take the time to understand how common exclusions can affect the coverage of your policy. Remember that E&O insurance is not a replacement for business liability insurance. Some examples of common exclusions include:
- Any claim that stems from dishonest, criminal, fraudulent, or malicious acts or any errors or omissions intentionally performed by the insured
- Bodily injury, disease, sickness, or death of any person
- Damage to tangible property
- Prior or pending litigation as of the start of the policy
- Selecting the right policy. Spend time with your agent reviewing the policy premiums, deductibles, Carrier financial strength, and claim capabilities and resources before committing to a policy. Our knowledgeable staff can help you make informed, confident decisions about your new policy to ensure it best meets the needs of your business model.