Errors and omissions insurance or tail coverage protects a business from claims that involve an alleged mistake on the insured’s part which leads to the client’s financial loss. Here we will discuss how to reduce or increase your tail coverage cost to receive the perfect amount of coverage for your business.
Never Let Your Tail Coverage Lapse
Based on the statute of limitations for the type of claim being made, an error and omission claim may still be filed to your company. Trying to purchase a new policy to cover the existing or past claim will not cover any of the costs. Plan ahead of time to get the right initial price and keep up on your payments.
The Total Cost of Errors and Omissions Insurance
Tail coverage is a flexible type of insurance when it comes to total payout amounts and the length of time each policy is enrolled. This leaves tail coverage cost entirely up to the business in terms of how much coverage they need. Here are a few short tips which may help you decide how much to purchase.
- Plan ahead of time (With who and for how long do you wish to plan to work with particular clients?)
- Pay in installments if possible (If you can’t pay a lump sum, try to negotiate a deal with your broker to pay in increments.)
- Hire a lawyer (Have a lawyer check your contract provisions to help you make an informed decision.)