Businesses need to have insurance. Insurance costs are a necessary expense since policies act as a layer of protection in the event that something happens for which the business is financially responsible. One kind of insurance that is beneficial to many different types of companies is errors and omissions insurance. Following are some businesses that should carry errors and omissions insurance in New Jersey.
What is errors and omissions (E&O) insurance?
Errors and omission insurance covers a company in instances where the business or people within the company are held responsible for services that were provided or failed to be provided that did not elicit the promised results. This same type of insurance is called malpractice insurance or professional liability insurance. Regardless of its name, this type of insurance protects the holder from errors or omissions a customer or client believes were made.
What does E&O insurance cover?
Although policies can differ, most E&O insurance covers judgments, settlements and defense costs in the event of a lawsuit. Companies without this type of insurance have to carry that financial burden themselves. Even a lawsuit that turns out to be frivolous can cost tens of thousands of dollars to defend. That type of expenditure can easily bankrupt small companies.
Why does a company need E&O coverage?
Businesses need the coverage provided by E&O insurance simply because mistakes are easily made. Even the most careful and conscientious workers can have a bad day. Also, even with risk management plans in place, perfection is impossible to guarantee.
Who should get E&O insurance?
E&O insurance is a great idea for any company that is capable of making a costly mistake. Therefore, it is a wise idea for any company that does business with the public. There are some professions for which it should be considered a necessary part of their overall insurance coverage.
Medical profession
Any type of medical profession should be protected by E&O insurance. It is far too easy to have a medical mishap during a surgical procedure or even a general check-up. When mistakes are made in the medical profession, a patient can be severely injured due to a mistake by a doctor or nurse. E&O insurance can help defray the costs of any lawsuits that arise from these mistakes.
Veterinarians
Even though vets work with animals rather than people, there is still potential for bringing harm to a patient. People love their pets and often consider them to be family. E&O insurance protects a vet in the event a beloved pet is harmed while under his or her care.
Attorneys
E&O insurance protects lawyers and other legal professionals in the event of a legal malpractice suit. If a client feels that they were misrepresented during a legal proceeding and sues the attorney, having E&O insurance can help save the practice from bankruptcy in the event of a costly lawsuit.
Brokers
Whether a broker works in high finance or real estate, it is a good idea to have E&O insurance. Brokers must deal with other people’s money and often must make decisions that can be costly to their clients. E&O insurance will help brokers financially handle the backlash of bad advice or poor investments.
Accountants
Similarly to brokers, accountants deal with money belonging to other people. A simple misplacement of a decimal can mean financial ruin for a client, and an accountant can become embroiled in a lawsuit. E&O insurance can defray the costs associated with such a lawsuit and allow the accountant to avoid having to pay the legal bills alone.
General contractors
General contractors are entrusted with the construction of houses and other buildings. A simple error in measurement can bring a building tumbling down, resulting in a loss of time money for the person who hired the contractor. It can also put the contractor’s employees in potential harm. E&O insurance can protect the contractor in both of these instances.
Consultants
Consultants make their living by giving other people advice. However, that advice can end in calamity. When this is the case, an E&O insurance policy can offer financial protection for the consultant in the event of a lawsuit.
Companies that deal with transportation
Any time a company has a vehicle on the road, there is potential for an accident. Whether the company vehicle is an ordinary sedan or a semi-truck the company can be liable for any damages that result from an accident. E&O insurance can help defray any costs associated with such an accident.
Not purchasing E&O insurance can put any company at a great financial risk. Prudent business owners should obtain E&O insurance to be protected from the potential dangers that can befall any business. If you have additional questions regarding E&O Insurance, contact a reputable local insurance agency to learn more.
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