E & O Can Be An Essential Safeguard

Professional liability insurance, also called indemnity insurance

, refers to a wide range of policies that protect professionals in case legal action is taken against them. Various plans over various degrees of coverage, but all policies of this type offer extra coverage beyond the scope of general liability insurance. Malpractice insurance is one kind of professional liability coverage. Doctors carry policies in case a former patient disputes the doctor's treatment. Lawyers, engineers, contractors, and real estate agents are also common plan holders. E & o, or errors and omissions insurance, is intended for any professional whose oversight could cause financial or bodily harm to befall another person.

Though anyone in any profession could be held responsible for an error, insurance agents, architects, notaries public, and financial brokers most often carry this insurance. Any job that involves complicated contracts, plans, or finances is especially vulnerable to legal action in case of an error or omission. These plans can be expensive are generally avoided unless necessary.

Like many common kinds of insurance, e & o is term based. Coverage is maintained as long as the policy is active and up to date. If payments stop of the policy is cancelled, the insurance company has no more obligation to offer coverage. Some companies will offer some prior coverage for instances that predate the policy or extensions to cover gaps between plans. For active professionals it is often important to avoid these coverage gaps.

In many financial sectors where risk is inherent, litigation is probable even in no-fault or disputable cases. Many e & o consumers buy the product for protection against false claims as well as legitimate complaints. Some firms will require that their employees carry e & o insurance at all times. These plans are usually purchased strategically during periods of risk or as long as the risk of prosecution is of realistic concern. E & o covers a policyholder for court costs and possible settlements up to the amount of the plan. More or less coverage can be bought depending on risk factors involved.

When shopping for e & o insurance, it is important to find an agent who has in-depth knowledge about this specialized product. Insurance agents who have not worked specifically with e & o might not know all the ins and outs. It is also important to examine the plans that they offer. Your profession will require certain areas of coverage that may or may not be included.

Although e & o insurance can be expensive, it is often an essential safeguard against the risk of legal action. In many professions where money changes hands, contracts are signed or big purchases are made, legal skirmishes are a part of the professional landscape. For these professionals, e & o insurance is too important not to have.

by: Bob Roberts

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