If you have car insurance, your premiums are based on personal factors like your driving record, age, the type of vehicle you drive, and where you live. With e o insurance, what you pay for this type of coverage also depends on factors that are unique to your business. For example, your business’ errors and omissions premiums will likely depend on things like what industry your business is in, where your company is located, and any prior claims experience.
The Danger of Remaining Unprotected
If your business does not currently have e o insurance, you could be putting your business’ finances and reputation at risk. Often, when a company is accused of making an error, defending themselves in court and paying for damages awarded to the opposing party can cost hundreds of thousands of dollars. If you or one of your employees made a mistake that resulted in extensive litigation, your business may be unable to effectively handle these costs and may be forced to shut down its operations completely.
When to Obtain a Policy
If you provide a product or service to your clients for a fee, it is best to obtain an errors and omissions policy the minute you start running your company. However, if your business has been providing services for a while, it is not too late to protect your business’ interests with one of these policies.