If you offer specialized services such as consulting, teaching or professional advice to customers, you are automatically kept at a level higher level of law and the responsibility. Your company may be held responsible if a customer claims that an error, omission or negligence due to your poor performance or failure to provide the level of advice or service that was provided led to their financial loss. Errors and Omissions Liability Liability aka Professional meets not covered by a general liability policy situations that deals with events related to property damage and personal injury.
errors and omissions protects professional business by protecting their assets and paying for defense and potentially costly legal fees if a customer makes a claim. It protects the professional customers by ensuring that there will be sufficient funds to pay the damages incurred if the professional services are considered defective.
We often associate the word "professional" with the doctors, lawyers, accountants, engineers or others who need education and extensive training to perform their functions, but it does no need to be a doctor or lawyer to have exposure to professional liability. Virtually every business that performs a service or provides professional advice to a client in exchange for financial compensation can be continued on the basis that he failed in his professional obligations.
In some provinces (such as Ontario, Quebec, Saskatchewan), errors and omissions is mandatory for professionals such as financial advisors and estate planners. Many professional associations (such as the Council of Ontario real estate or the Alberta Human Resources Institute), have mandated the obligation to carry errors and omissions in order to practice in their fields. We recommend that you check your provincial legislation or your professional association / group whether or not you need to make errors and omissions insurance.
Other types of professionals who might need errors and omissions are IT / Computer Consultants, Software Developers, architects and engineers, health professionals, Interior Designers, Management Consultants, Advisers and mediation specialists, web hosting companies, Oil & Gas Consultants, Advertising Agencies, wedding Planners, travel Agencies, etc.
key features of Errors and Omissions policy:
Claims-Made: political claims-made protects the insured against claims or incidents that are reported while the policy is in force; virtually all errors and Omissions policies today are provided on a claim form. To establish a blanket, three conditions must be met :.
- A policy should be in place at the time an application is made
- Many policies specify a retroactive date in the statements that should be the creation date of your claims submitted first errors and omissions policy; a retroactive date should remain the same each time your policy is renewed. A retroactive date or date of earlier facts must be present on the policy and it must be dated at least as far as the services giving rise to such claim were provided.
- And early notification of the claim to the insurer.
Limits and deductibles:
- most errors and omissions policies have a claim Each / Each occurrence limit is the maximum an insurer will pay for damages resulting from a single loss.
- policy may also contain an aggregate limit which is the insurer will pay for all damages resulting from any claims / losses combined in a policy year.
- costs of defense may be subject to specified limits for each claim / each occurrence and aggregate.
- Some errors and political omissions may have a deductible is the amount you must pay out of pocket for each claim or loss before your insurance will be applicable
Defense :. one of the key features of a policy errors and omissions is a legal defense in case of disaster. The legal costs associated with defending a claim (justified or not) can be considerable; if the defense was not covered by your policy, you would be stuck paying from your own pocket defense costs. According to the specific conditions of the policy (if the defense is inclusive of the limits or outside the specified limits), it may or may not erode the limits of your coverage.
A form of standard or policy wording does not exist in errors & omissions world; it varies enormously from one language to another. If you are a "professional traditional" like a doctor or a lawyer, you can get specific errors and omissions policy to your profession. For all other (as a management consultant, real estate agent or even a photographer), is a professional various wording of responsibility. There is no "one size fits all" errors and omissions policy
The above information is found not exhaustive or complete !; there are many extra features and variations for each errors and omissions language and politics, including definitions and exclusions that must be carefully considered. Talk to your broker and confirm that you are insured on a policy form suitable as related to your profession, exposures and risks
Blog Author :. Aliya Daya | Commercial Account Executive | Rogers Insurance Ltd.
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