If you are a business owner, or a professional of any kind, then it is important that you have various types of insurance and understand how it works, including errors and omission insurance coverage limits. You need to have this type of insurance to cover you in the event of errors that end up with you seeing the inside of a court room. Without this insurance, you could end paying out a lot more money if you are sued than you would have to if you have the proper amount of coverage. It is often recommended that you get more coverage than you think you actually need, just in case you do end up needing it in the future.
What Is Errors and Omission Insurance?
Errors and omission insurance is coverage that you can get separately or have added to your commercial general liability insurance coverage. You would purchase this type of coverage if you want to protect yourself or your business from individual claims for services you did not provide or mistakes that you may have made. Most of these policies are sold for professional liability and malpractice. This type of insurance can protect corporations, as well as individuals, including real estate agents, health care professionals, accountants, lawyers and others. This insurance does not usually cover most professional liability problems, mistakes or arguments that involve contracts.
If you do not have this coverage, you could have to spend a lot of money to cover damages that were caused as a result of your actions or omissions. In addition to the actual amount of the suit, you may also be required to pay for all legal fees that arise from the case.
What Are the Limits?
There are many different types of policies that you can get, and the errors and omission insurance coverage limits you have may differ from someone else who owns a different type of business. This insurance coverage is going to help you to pay for various expenses if you are sued, including court costs and other legal expenses. As a rule, the minimum amount of coverage is about $5,000, but errors and omission insurance coverage limits can go as high as several million dollars. It all depends on the insurance needs of your company. For instance, in the case of possible malpractice suits, most coverage is issued in increments of $100,000. Deductibles can range from $1,000 to $25,000, depending on what your company can afford.
If you have insurance coverage, which as a business owner you need to have, you should understand everything about your coverage. This means learning about your errors and omission insurance coverage limits and making sure that your limits are going to provide you with the coverage you need.