Error And Omission Insurance, American Financials Business Insurance Policies

Error And Omission Insurance: protects business professionals whose clients could claim damages as a result of the business professional's faulty performance, the faulty performance may be because of a neglient act, error, or omission by the professional; hence, the name of the insurance.

Errors and omissions insurance protects the business professional by shielding his or her assets and paying for his or her defense if a client makes a claim. It protects the professional's clients by ensuring that there will be adequate funds to pay for damages incurred if the professional's services are deemed to be faulty.

Errors and omissions insurance is important for professionals such as Estate Planners and Financial Consultants. If you provide professional services that involve getting paid for advice, you should check to see whether or not provincial legislation requires you to carry errors and omissions insurance.

Other types of business professionals who might need errors and omissions insurance include computer consultants, software developers, planners, architects, accountants... In other words, if your clients might sue you for damages resulting from faulty performance of your services, you should consider carrying errors and omissions insurance, because We live in an increasingly litigious society. For small businesses in particular, the chances of getting sued for professional liability are greater than ever. However, most small businesses - with the notable exception of health care and real estate - are not aware of how to construct an insurance portfolio that will mitigate the risks of such litigation. Learn the role of errors and omissions (E & O) insurance, how to safeguarding your small business and how improvement in business processes must accompany an E & O insurance purchase.

Who Needs E&O?

While errors and omissions insurance has been a hot item for doctors, lawyers, financial services professionals and realtors, all businesses face professional liability risk. To determine whether you need E&O, ask yourself : "Can I afford to wage or lose a civil lawsuit arising out of professional error on my part?" For the majority of small businesses, the answer is no. That's because the American legal system tends to severely punish professional error with award judgments in seven figures and up. Even if you win a lawsuit, there's the question of paying the lawyers.

If you subject E&O to a quick risk-benefit analysis, you'll see that the annual premium, which is generally affordable, yet varied depending on how many individual employees you insure, and the nature of your business, is well worth the protection. Remember, the vast majority of small businesses can be shut down by a single unfavorable ruling in court.