Although it is true that organizations and professionals have experience in the area in which they operate, this does not mean that they are not exempt from making mistakes. Another situation may be that the end consumers of the service claim that the professional did not act responsibly or that the results were not as expected, which is why they go to court, with increasing frequency, to file their claims and exercise their rights. It is for this reason that it is extremely important that both companies and independent professionals have a Professional Liability for Errors and Omissions (E&O) policy.
Knowing the Facts
Professional liability insurance, as it is generally called, faces a number of challenges today, and tackling them depends largely on your knowledge of the matter. It is for this reason that education on the subject is a fundamental factor, so that both companies and self-employed professionals, who provide services to third parties, have the adequate and necessary coverage to protect themselves in case of incurring such acts, either by recklessness or negligence.
What is an Errors and Omissions Policy?
First of all, it is important to fully understand what negligence is. According to the Cambridge dictionary (2019), it is defined as “the lack of attention or care for someone or something for which one is responsible.” In this case, it refers to the performance of professional activities. Once this is understood, the term itself becomes more relevant because it is precisely one of the key variables of a policy of this nature and its scope that the insured person performs their professional functions without major setbacks.
What is sought with an E&O policy is to cover the expenses derived from a liability claim presented to the insured or by third parties, against damages caused by negligent acts (including gross negligence), malpractice, errors or omissions, committed by the insured or their dependents in the exercise of the activity related to the professional services. Likewise, it is an endorsement that allows both the insured and their clients to have the confidence necessary to achieve successful negotiations, productivity, and results.
It is an alternative to mitigate the impact that could be generated in the event of any acts described within the scope of the coverage. The objective is to secure the professionals’’ reputation been built over the years and to have as little damage as possible. Ultimately, the purpose of the coverage is to compensate the insured for the expenses that are obligated to be paid for the events that occurred during the project.
Contact An E&O Professional
Ultimately, the E&O policy is the best alternative for professionals to protect themselves against possible lawsuits arising from negligent acts, errors or omissions, carried out during their professional activities. It is extremely relevant that they understand why it is necessary to take out a policy of this nature and how it can become an efficient solution if services are being provided to third parties. Contacting insurance professionals such as Mountain Insurance can help you learn more.