Professional Liability Insurance and E&O Concerns

In business, everyone is capable of making mistakes. Even with the best employees and the best risk management practices in place, these things happen. As with any insurance, the best time to buy an E&O policy is before the risk is taken. As someone who knows they will face certain exposures, you should make professional liability insurance a part of your insurance portfolio.

Each type of business has different needs and concerns

Many contracts with clients will require some type of insurance to be in place. It gives clients peace of mind of knowing they will be compensated if there is an unfortunate error or omission. There are no “standard” policy wordings for E&O coverage. Read each policy carefully to make sure that the coverage being offered fits exposures associated with the type of work you perform. An attorney, a doctor and a computer programmer all have exposures; however, the same policy would not work for all three.

Policy terms and conditions vary

Some policies also include defense expenses within the limit of liability, however some will exclude punitive damages. The wording of these policies can vary greatly,

Which is why it is very important to find specialty insurance professionals that understand the E&O coverage and marketplace. Different situations require the proper information being disseminated, depending upon the type of exposure.

The cost of E&O insurance may vary greatly depending on the class of business, location, past claims experience (both of the individual insured and of the industry they are in), as well as from one insurance company to the next.

An insurance company underwriter may ask for copies of contracts, a description of quality control procedures, documentation procedures, training procedures, etc., or they may want nothing more than a completed application.

It may all sound quite complicated, which is why, when purchasing professional liability insurance it is important to speak to a knowledgeable agent who can determine what the proper coverage types and amounts are for you.