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Errors and omissions insurance (E&O Insurance)—also referred to as professional liability insurance and medical malpractice insurance—comes into play if you make errors and/or professional negligence in your business.
This includes coverage for alleged or actual professional negligence, missed deadlines, undelivered services, inaccurate professional advice, and more. If your negligence causes a business to lose money or leads to purchasing errors, you'll likely be sued. An errors and omissions policy can help cover defense costs.
Anyone who uses their specialized knowledge, whose advice impacts financial decisions, or whose negligence may directly impact someone's health and wellness needs errors and omissions—E&O—insurance.
If an attorney makes an error in a lawsuit that costs you thousands of dollars in fines—they can be held liable. If an architect makes an error in their plans, it can cause severe structural and property damage to a building or seriously injure someone.
If you make any mistake in your business, how much can you afford to cover? Will a lawsuit bankrupt your small business? If the answer is "no," you need to make sure you get the right insurance to safeguard your business.
Many factors impact how much errors and omissions coverage will cost will be impacted by some of these factors:
Other factors may influence what you pay depending on the insurance company.
Most small businesses pay between $500–$1,000 per employee per year for errors and omissions insurance, landing the average around $750 a year. Other companies claim that the average is closer to $1,735 a year or between $900–$2,000 for errors and omissions policies.
A smaller percentage of businesses pay above or below that amount. These prices are typically for policy limits of $1 million per claim/$1 million aggregate during the lifetime of the E&O policy.
The cost of an errors and omissions insurance policy increases as you choose higher limits:
The amount of coverage that's necessary for professional liability policies is determined based on your specific business. Real estate agents will likely need more coverage than an artist. We always recommend that you speak with an insurance agent to determine the coverage limits you need and what you might pay for an errors and omissions insurance policy.
Small business owners can do a few things to decrease the cost of their business insurance package:
Sometimes, you can save money on your insurance by bundling different policies with the same insurance company. If you purchase a business owners' policy (which includes general liability insurance, commercial property insurance, and business interruption coverage) in conjunction with E&O insurance it may lower your annual premiums. If you're already in the market for this coverage, speak to an agent about bundling options.
Additional coverages purchased with an insurance company can further lower your costs. An experienced agent can help you determine what you need and help you find the best rates.
At CommercialInsurance.Net, we strive to help small and medium-sized businesses get the insurance coverage you need at a price you can afford. If your employees make a mistake, the cost of errors can bankrupt a small business. Call us at 877-907-5267 and we will help you find the insurance coverage you need at a cost you can afford.
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