E&O insurance is an insurance product that protects a business against risks that may arise from negligence or breach of contract by an employee or member of the business. Professional liability insurance, sometimes called professional indemnity insurance but most commonly recognized as errors & omissions insurance in the US, is an important form of insurance that helps to protect business against claims made by clients against companies. E&O insurance policies have two main sections: Professional Liability Insurance and Professional Employer’s Liability Insurance. The professional liability insurance section of the E&O insurance policy covers claims against an employee, business entity, or a member of the business organization for negligence. Claims for other things not mentioned above are also covered under the professional liability insurance section of the policy.
The Benefits of E&O Insurance
Errors & omissions insurance (E&O) covers all those areas mentioned in the previous paragraph, including errors and omission that results in damage to a client’s property, for example, if a car manufacturer manufactures a car that has been determined faulty by an experienced mechanic, and the mechanic sues the car maker for damages to property, the negligence of which could have been prevented if the car manufacturer had produced the car with ergonomic controls and adjustable speedometers. This insurance protects business organizations from claims arising from this sort of incident. Business organizations can take different legal actions, including patent infringement suits, and damages for mental and physical suffering caused by the negligence of others. E&O insurance protects E&O clients against claims arising from negligent acts of others. It is designed to provide protection from claims made by employees, customers, suppliers, workers, business organizations, etc., as well as from any other person or group of persons who may come into contact with the E&O client during the course of E&O business.
In order to be adequately covered by E&O insurance policy, the potential victim should prove that he/she was made the victim of negligence, either through gross negligence or some other form of unjust action, and that such negligence affected the E&O contract, either directly or by causing a breach in fiduciary duty. The claim should also show that the plaintiff suffered damage as a direct result of the negligent act. The amount of damage to property or bodily injury inflicted upon the E&O client may be a deciding factor as to how much money a client is entitled to receive in the settlement. The insurance policy will pay for property damage, personal injury, and medical bills related to the claim, but will not cover mental or emotional suffering. If the mental or emotional suffering is not resolved after a reasonable amount of time, the claim is considered to be waived. In other words, if an E&O client cannot prove that he/she was made the victim of negligence, it is considered to be false and therefore the claim is considered null and void.
In order to determine whether an individual or business organization is at fault for an E&O occurrence, an insurance adjuster must first determine the cause of the occurrence. An insurance adjuster’s duties include determining the liability of the business or organization and analyzing the potential financial impact to the E&O business. Once all the potential causes have been analyzed, the insurance adjuster will then make a recommendation about the payment of the claim. Insurance companies assign an adjuster to each E&O claim and it is the responsibility of the business or the person filing the claim to pay the appropriate claim amount from his/her own pocket to the insurance company.
There are many different types of insurance claims, including employee theft, property damage, business interruption, product defect, advertising claim, and negligence claims. Each type of claim has its own unique set of complexities and E&O insurance is no exception. Typically, if an E&O claim is filed within three years of the incident, the company is generally obligated to reimburse you for your losses. Some insurance companies offer accident insurance or workman’s compensation coverage, which can be used as part of the E&O insurance claim. Some insurance companies offer additional benefits to their clients who have suffered loss as a result of E&O.
It is important to understand that E&O insurance does not include liability or medical expenses coverage. It is intended to provide a lump sum of cash when you have suffered a loss because of an accident. E&O insurance is most often purchased by businesses and individuals that are in need of short-term insurance coverage after a disaster or injury. While E&O insurance is not mandatory, it is strongly recommended.
If you plan on using E&O insurance as part of your business planning, you should discuss the purchase of the policy with your insurance agent. You may find that the benefits of E&O are not worth the monthly premiums. Additionally, E&O insurance policies do not cover all of the losses or expenses that occur in your business. Therefore, it is necessary for you to determine the extent of the potential losses to your business before purchasing a E&O insurance policy.
The insurance offered through E&O is generally designed to provide peace of mind and economic security. Insurance companies offer competitive rates and a wide range of coverage options to meet the needs of the E&O insurance consumer. It is easy to compare the different rates and packages offered by these insurance companies by visiting their websites. Some companies even allow you to fill out a rate quote request form online. Once you receive a rate quote, you can determine the best policy for your individual needs.