Understanding Errors And Omissions Insurance

​Errors and omissions insurance protects you in the event of claims from your professional services due to negligence, failure to act, your act, among others. Your insurance company will state a liability limit regarding the amount of coverage they can offer to your errors and omissions policy.

What Is Included In The Coverage
Errors and omissions insurance is also referred to as malpractice insurance or professional liability. When there is a claim against your business, this policy defends you from it. For example, if you are at fault for the injury of your client, the insurance will help you pay for the damages according to the limits of your policy. You can find errors and omissions insurance that provide high deductibles.

What Is Not Included?
Errors and omissions insurance does not cover the following:

• Premises liability
• Intentional acts
• Criminal acts
• Group claims, for example, medical group
• Punitive damages or fines

Note that E & O insurance also does not act as a substitute for general liability insurance.

Claims Made Coverage. This refers to the reason or act that leads to a claim. It has to occur within the policy term period. The claim also has to be made (or filed) while the E & O policy is in effect. The claim is denied is you have a lapsed, non-renewed, or cancelled policy. 

Occurrence Coverage. With this, the act that causes the claim has to transpire during the term of the policy. But, you can still report the claim in case the policy is not renewed, has lapsed, or cancelled. Occurrence coverage can be unpredictable and usually has a high risk of claims, making it unavailable to many kinds of professionals. 

Prior Acts Coverage. You can purchase this coverage if your professional practice buys another company. This is because the other company may have lingering claims. Buying prior acts can help cover the risks that the other practice may give you after assuming ownership.

Tail Coverage. This can be your option if your claims made coverage is not renewed, lapses, or expires. Tail coverage offers you an extended period for two to five years to report claims. It can turn the claims-made coverage into occurrence coverage.

Conclusion
Talk to your insurance agent if you want to understand more about errors and omissions insurance.

At Desmond Insurance, we do our best in making sure that our clients are well-protected with affordable and comprehensive policies. We make sure to go the extra mile to help you with your needs. To learn more about how we can help you, please contact our agency at (859) 491-5100 or Click Here to request a free quote.