Errors and Omissions Insurance

Having E&O Insurance Avoids Complications

Insurance agents have a difficult job when it comes to helping customers comprehend many of the products and services they offer. Never does an agent want to sell someone a policy they don’t really need or can’t fully utilize, nor do they want to be accused of errors and omissions (E&O) in the act of providing their services.


That‘s why it’s so important to ensure that there is always a clear understanding of the services that are being offered, and to carry Los Angeles insurance for insurance agents, in the form of E&O coverage, in case of instances where a client feels they were given false or incomplete information about a product that they’ve purchased, even though it may simply have been a misunderstanding.


Some insurance products can be difficult to comprehend


Because many products in this industry are complex, this is where agents need to demonstrate their knowledge, as well as their communication skills, in order to explain exactly what the details of the coverage is. Potential clients rely on your expertise, and generally depend on your giving them a clear understanding of what the product has to offer. Utilizing the best risk management practices could mean the difference between selling a policy and avoiding a situation where a client files a claim.


When a client trusts the judgment of the agent fully that is clearly an indication that things are going favorably. It helps to make yourself available to have discussions with clients over the phone, or in person when possible, especially for new clients and prospects, who may be struggling to fully understand all the language that exists within the policy.


Educating clients pay dividends 


Most companies are moving away from physical locations into virtual operations, which of course expose them to a host of new risks. These types of exposures will continue to develop along time, so it’s important to keep clients abreast of any and all potential changes. Finally, it’s crucial to listen to clients to better understand their business and be able to make informed decisions as to what will best suit their needs.


Some agents tend to believe that they have the necessary skills needed to provide the best service to their clients, not taking into account that not every client has the same needs. This is where problems can crop up, but with E&O coverage, available through los angeles insurance companies, these types of problems can become of little or no concern.

Common Issues That Require NJ Errors Omissions Insurance

The need for NJ errors omissions (E&O) insurance includes professionals across a wide range of industries, and some of the people who can benefit by having E&O insurance are doctors, lawyers, accountants, architects, and engineers, to name a few. There are however, many others who need this type of coverage that often don’t even consider purchasing a policy of this type. Those individuals range from advertising agencies to commercial printers, web hosting companies, and even wedding planners.

If you’re in the business of providing a service to your client for a fee, then chances are you could be sued and therefore you have an E&O exposure. You might want to consider what could happen if, for any reason, the service you perform for a client is not done correctly or you miss a deadline, and it ends up costing your client money, or perhaps harms their reputation. They might well seek retribution through the courts.

How claims end up being filed

In the case of the wedding planner, for example, let’s say that he or she reserves the reception hall, the band, the caterers, valets, and other required service providers for the wrong date. When everyone shows up except the wedding party and guests, or only the wedding party and guests show up, you can imagine the amount of emotional distress this would cause to the couple expecting to perform their nuptials if this were to happen.

A freight forwarder could ship some time-sensitive cargo to the wrong city, or even the wrong Country and this could spell disaster as well. Too many issues of this nature are always a possibility, and while it may be an honest mistake, sometimes an error of this sort comes with a price. No one wants to be named in a costly lawsuit, but if it happens, wouldn’t it be wise to have the right insurance solution in place?

The best time to buy an E&O policy is, of course, before any error occurs. If you’re in the service industry and you know you will have these kinds of exposures, make NJ errors omissions insurance a part of your insurance portfolio. Many contracts with clients will require insurance to be in place because it gives them the peace of mind of knowing they will be compensated if an issue springs up.

E&O Policy Offers Protection But Not Everything Is Covered

Mistakes happen – and when they do, an E&O insurance claim can result if you are deemed responsible for causing financial loss to someone due to your negligence, errors, omissions, or otherwise failure to provide the professional services that you were hired to perform. Your professional insurance agent can provide you with guidance on the entire suite of business protection that you need as well as access to coverage from first-rate insurers with high ratings for their claims-paying ability, which attests to these firms’ safety and security that has been proven over many years. These companies are well-known for paying covered losses for their customers. However, you should be aware of some incidents that are very commonly excluded from this particular coverage.

What E&O often excludes

  • Acts that are deemed dishonest, malicious, criminal, or illegal, including intentionally violating a law, regulation, a statute or an ordinance
  • Providing services while representing another company, group, or charity that is not named as a covered organization in your policy
  • Causing damage to property, or loss of use that stems from such damage
  • Instances of slander or libel
  • Illegal discrimination against someone
  • Causing pollution
  • Punitive fines, damages, or penalties that you are deemed responsible for
  • Bankruptcy
  • Failing to secure, provide, or maintain financing or other types of financial means
  • Acts of humiliation, wrongful entry, imprisonment, eviction, invasion of privacy, or claims of malicious prosecution
  • Violating any securities act
  • Causing bodily harm to someone, including illness or death
  • Infringing on others’ copyright, patent, or trademark protections

The good news is that some of these exclusions can be protected with other types of coverage. Knowing exactly which policies cover what risks is an important job best left to the experience of your professional insurance agent. He or she will help you find the balance between acknowledged risks, finding coverage that addresses an appropriate amount of those perils, and obtaining coverage with premiums and deductibles that will make sense for your company’s budget. Don’t make the mistake of not obtaining the advice of a professional; call your agent today to learn more about insuring for the liability you face for the mistakes you may make.

Errors & Omissions Insurance Protects Design Professionals

Architects, along with engineers and other design professionals, need insurance coverage. Whether they are part of a firm, or working as an individual, if they are accused of improperly performing services that cause a client to suffer an economic loss, this requires errors & omissions insurance (E&O) as a way to mount a defense that can otherwise be quite expensive. Most firms also understand that they don’t have the resources or the expertise to defend against such claims.

Architect professional liability insurance, (also known as errors & omissions insurance) protects architects if a client alleges that they were professionally negligent or in some way failed to perform their professional duties. They may also claim that your firm failed to perform as promised in the contract. Insurance policies are also available for design and consulting departments of contractors as well as independent design consultants.

E&O insurance helps you to protect your business

The fact remains that the high cost of preparing a legal defense could easily put your architectural services firm out of business. Your personal financial security could also be at risk dependent upon what type of policy you have and the provisions within the contract.

Aside from the possibility of becoming embroiled in a lawsuit, there is your valuable reputation that may come under fire and an E&O policy helps protect the valued relationships you’ve developed by protecting, not only your own financial security, but your client as well.

Most architects have experienced having to deal with a disappointed client and know that even a small mistake can end up having serious consequences. Everyone is capable of making an error at some point in his or her career. Whether it involves an equipment failure, or is just a matter of some human oversight, if it results in personal injury, it can also result in a lawsuit.

Having errors & omissions insurance coverage insures that you will have funds to help you through those instances when mistakes blossom into litigation. Some clients may even require that you carry E&O insurance and the right type of policy can protect both the architectural service firm, and subcontractors, from claims of a perceived error or omission, even months after the initial job is completed.


Errors and Omissions Insurance Is Vital to Every Industry and Profession

Even the most competent companies can make mistakes from time to time, and in some cases these mistakes can result in immense financial instability. That’s why securing the right e&o insurance for agents is so important. These policies can offer protection against claims resulting from financial loss incurred by another.

What Is Errors and Omissions Insurance?

Also known as professional liability insurance, errors and omissions coverage provides protection for service providers in the event of lawsuits or other legal proceedings. Such coverage can afford funding for things like legal defenses, as well as settlement payouts if necessary. This will mitigate any financial damage to the company in question, which is crucial for continuing operations.

What Constitutes a Professional Liability Claim?

When seeking reliable e&o insurance for agents, understanding what constitutes a claim is extremely important to securing the appropriate coverage. In order to be covered by an e&o policy, claims must involve allegations of negligence related to either unsatisfactory performance or a failure to perform as expected. This coverage does not apply to instances of intentional fraud or other illegal activities, and in most cases will not afford payment for punitive damages.

Comprehensive Insurance to Suit Your Specific Needs

E&o insurance for agents goes beyond standard policies like general liability. While such policies are extremely useful, they must be accompanied by specialized coverage to ensure comprehensive protection is in place. Doing so can protect an organization from all likely risks, which is vital for continued success.

Minimizing E&O Insurance Cost

Consultants are on the front lines when it comes to being sued by unhappy clients. This is often because of the nature of the work they do, which is primarily giving advice, or making suggestions, which clients often follow because they understand that a consultant is supposed to have their best interests in mind.

Having errors and omissions (E&O) coverage helps protect consultants or advisors from lawsuits brought on by clients alleging that they were given bad advice or were the victim of poor decision making. Repeated instances of litigation of this type can greatly affect e&o insurance cost for consultants and advisors. In addition to purchasing E&O coverage, consultants should have an understanding of what the policy does, and doesn’t, provide.

Understanding the policy language

While there is no standard professional liability policy for consultants, each insurer will offer its own specific coverage. In order to determine if the coverage offered will be acceptable a detailed analysis of the insurance contract is required. Realize that the exact definition of “wrongful act” can affect your coverage.

Find out what is specifically excluded from coverage and if the insured has the right to refuse a settlement offer in a claim. It would also be prudent on your part to determine if the policy pays on behalf of the insured or does it indemnify the policyholder.

Professional liability insurance protects consultants from allegations of a “wrongful act,” which is defined by most policies as “an act, error, omission, misstatement, misleading statement or neglect or breach of duty”. Professional liability insurance is designed to protect a consultant from allegations that the job was either not done right, or that the job was not done well enough to satisfy the client’s needs.

Defense costs can be a major burden on a firm

Professional liability insurance pays for the cost to defend a suit in addition to paying any award that is made against a consultant in a lawsuit. Typically, errors and omissions policies pay defense costs from within the policy limits. For example, if you have a $1,000,000 policy, the cost for an attorney is included in the maximum payment amount of $1,000,000.

This policy is usually on a “claims made basis” and this means that the policy pays for lawsuits brought only during the policy period. Legal actions can be brought years after the actual event occurs, so allowing coverage to expire can obviously jeopardize protection, which will further lead to having a higher e&o insurance cost in the future.

Key Factors That Determine E&O Insurance Cost

In today’s litigious society, making sure that your business is adequately protected by carrying the right types and amounts of insurance coverage is more important than ever. In areas of professional liability such as Errors & Omissions (E&O) coverage, this is particularly true. By understanding some of the factors that impact your E&O insurance cost, you will be in a better position to make changes that can lead to lower premiums.

What is E&O Insurance?

At its most basic, E&O, a type of professional liability insurance, covers your business for any inadvertent mistakes that you or your employees make while providing services to your clients that result in causing them financial harm. Your policy also provides liability coverage for omissions or actions that you should have taken but did not, and that also lead to financial harm for your client. Your policy limits will include defense costs and damage awards when a claim for negligence is made by one of your clients.

Key Factors That Determine E&O Insurance Cost

In today’s litigious society, making sure that your business is adequately protected by carrying the right types and amounts of insurance coverage is more important than ever. In areas of professional liability such as Errors & Omissions coverage.

How is E&O Insurance Cost Calculated?

There are a number of factors that will affect your premium. Some of the most common are:

  • Size of your business
  • Your area of specialization
  • The mix of business that you handle
How to Reduce E&O Premiums

Taking some simple steps can help to lower your E&O insurance cost. Make sure that your professional staff is licensed and up to date on requirements in your field. Stay within the scope of your expertise. Provide your staff with written customer service guidelines. Keep paper trails of all transactions with your clients. You can also lower your premium by accepting a higher deductible. Choose a licensed insurance agency that specializes in E&O insurance and who has established relationships with quality insurance carriers. This will ensure that you get the best rates possible.

Ask Your Agent for an Errors and Omissions Quote

Many professionals are in a position where they face exposures, commonly referred to as “omissions” or “errors” simply by providing the type of services they do to their many clients and customers. Errors and omissions (E&O) insurance is for a wide range of businesspeople, from doctors and lawyers, to accountants, architects, engineers, and many others. If you are in the business of providing a service to clients for a fee, you may, somewhere along the line, encounter an E&O exposure or two.

Many insurance agents have clients who may be targeted for an E&O claim and those agents may have a difficult time convincing their clients that they actually should be concerned. This is where agents should provide an errors and omissions quote or several, and use their knowledge and expertise to help their clients understand the risks and ensuing consequences should they continue doing business without this important coverage in place.

Frequently asked questions about errors and omissions liability

There are novices unsure just how an E&O policy works, and they may also be pondering exactly who needs E&O, why they would need it, when they should buy it, and where to find the right policy to fit their needs.

The answer is simple; E&O insurance covers your company, or you individually, in the event that a client holds you responsible for a service you provided, or failed to provide, because it did not result in the expected, or promised, results. For doctors, dentists, chiropractors, etc., it is often referred to as malpractice insurance.

For accountants, lawyers, and other professionals, it may be called professional liability. In any case, it covers you for errors (or omissions) that you may have made, if the service is not done correctly or on time, and it costs your client money or harms their reputation.

Most E&O policies are designed to cover judgments, settlements and defense costs. Even when the allegations are found to be groundless, the cost to defend the lawsuit can be quite costly. This could possibly bankrupt a smaller company or individual, and for larger companies, it can have a lasting effect on the bottom line.

In addition to the professions listed above, others with similar concerns include individuals ranging from advertising agencies to commercial printers, Web hosting companies and even wedding planners. If you feel you have an E&O exposure, contact your agent for an errors and omissions quote, and get the type of protection you need and deserve.



photo credit: Bootcamp Business Model Canvas the Game, June 5-7 2013 in Amsterdam (license)

Do You Really Need to Have Errors and Omissions Insurance?

Whether you are an independent insurance agent or you work for a large insurance company, the cost of E&O insurance for insurance agents may cause you to question whether or not you really need to have it. If you are currently wondering how necessary errors and omissions insurance really is, here is a scenario that you should think about:

Unexpected Lawsuits

No company ever plans to become involved in one or more lawsuits, which is why such a scenario often catches businesses by surprise. Even if you are very careful to make sure you do not make any mistakes in your line of work, no one is perfect. You could easily make a professional mistake that ends up causing financial harm to one or more of your clients. Additionally, one of your clients may think that something is your fault even when it is not, and they could end up suing you as a result. If you are not prepared with E&O insurance for insurance agents, you could be faced with incredibly damaging litigation costs that might even force you into bankruptcy.

Prepare for the Worst

Errors and omissions insurance helps you prepare for the worst-case scenarios by offering invaluable coverage for unexpected legal claims. By carrying adequate insurance coverage, you will be more likely to keep your insurance company up and running in this competitive economy. To find out more about coverage and rates for E&O insurance for insurance agents, talk to your insurance company today.


photo credit: e3Learning cc

Important Factors in Your Insolvency Coverage

Insolvency coverage is an important element of an insurance agent errors and omissions program. Many insurers will include insolvency in their plans, however not much attention is paid to it. Some have found out too late that they are not covered for insolvency due to certain requirements that they have not met. There are important factors that agents should be aware of in regards to their insolvency coverage.

They Differ for Each Insurer

Some individuals mistakenly think that all insolvency clauses are the same. It is important that an agent checks to see the particular parameters of the plan they are in or are considering. Most plans today do have them, however there are still those that do not.

Rating Requirements

Each insurer has specific company rating requirements that can affect an agents insolvency coverage. Some require that the rating come from certain companies and that it is calculated utilizing a particular scale. Furthermore, the qualifications may be specific to the sign, meaning if a company requires an A rating, an agent with an A- rating could not qualify.

Size Requirements

Along with rating requirements, companies may also have size requirements. Again, this will vary according to the companies set precepts, as well as organizational requirements.

It is important that agents know what stipulations are in place regarding their insolvency coverage. Before committing to an insurance agent errors and omissions program, one should make sure that it provides all the right coverage.


photo credit: Angelo Piccolella cc