Errors and Omissions Insurance For Small Businesses

If you’re a hair stylist, veterinarian, lawyer, architect or another type of small business that provides professional services, consider getting this insurance. It typically covers legal costs related to errors or mistakes that can result in reputational or financial harm to your clients.

Some industries require this coverage, or Errors & Omissions insurance, by contract. It’s also commonly known as a malpractice policy. Find out more at Leading Insurance Outsourcing Company.

Errors and Omissions (E&O) Coverage

Errors and omissions insurance, also known as professional liability insurance or E&O, protects your small business from accusations of negligence or substandard work. It covers damages, settlement costs and court fees if a client sues your business for dissatisfaction with the results of your service or advice. It is typically required by law for many professions, including real estate agents, tax preparers, lawyers and architects. In addition, tech professionals can get a bundled policy that includes both E&O and cyber insurance.

The cost of E&O depends on several factors, such as the type of risk, your business size, your coverage needs, claims history and location. However, E&O is often cheaper than general liability, since it only protects your business against lawsuits over faulty advice and services. You can get a quote online or speak with a licensed agent to customize your E&O policy. Coverage limits can vary from $250,000 to $2 million or more. This is why it’s important to consider your risks and budget when deciding on your coverage.

Professional Liability Insurance (PLI) Coverage

Professional liability insurance helps protect business owners from claims that they made errors or omissions in the professional services they provided. This coverage is especially important for those who work in professions where high stakes decisions or procedures directly impact patient well-being. It may also be required by contracts or by state licensing.

PLI policies typically cover only alleged errors or omissions that were committed in good faith. Fraud or deliberate negligence, however, are not covered. Additionally, these policies often include a prior knowledge exclusion, which prevents coverage for acts that were known about at the time of the policy’s inception.

Most businesses require a certificate of insurance as proof they have this type of coverage before they can accept new clients. It’s a smart idea to review your PLI policy renewal every year to ensure it is still providing the protections you need.

Medical Professional Liability Insurance (MPLI) Coverage

The healthcare landscape is constantly changing, and so too are the risks and challenges for MPLI providers. New medical advances and evolving legislation can impact liability and the scope of coverage. MPLI providers must be attuned to these trends to ensure that healthcare professionals and institutions have the appropriate protections in place.

KAMMCO offers MPLI solutions for hospitals, physician groups, clinics, and independent physicians to protect them against malpractice claims. These policies are available in both claims-made and occurrence form and cover a range of exposures. We also offer telemedicine coverage to address the unique risks of remote consultations and other liabilities stemming from artificial intelligence (AI) diagnostics and decision support systems.

Choosing the right MPLI provider is crucial. Some companies sell this type of insurance at deeply discounted rates, which can be financially risky for the insured. It’s important to partner with an independent agency like Fifth Avenue Agency that can help you evaluate options that can meet your needs.

Medical Malpractice Insurance (MML) Coverage

Physicians and other medical professionals are exposed to malpractice claims on a regular basis. This type of coverage provides protection against lawsuits over disputed services that result in bodily injury or death. Malpractice insurance is typically provided by a private insurer or through a medical risk retention group (RRG). A majority of physicians report being sued at some point in their careers, so carrying malpractice insurance is essential for many healthcare practitioners.

Professional liability policies commonly exclude claims based on intentional dishonest activity. This exclusion is designed to prevent insurance coverage from being extended to activities that violate the law or public policy.

Even non-medical professionals can be held liable for negligence in their work. For example, a hair stylist may botch a dye job, or a massage therapist could cause an allergic reaction in a client. While general business liability can cover some of these types of claims, specialized professional liability coverage is often required to ensure the financial stability of your practice.