Errors & Omissions Insurance Questions

How Do I Obtain an E&O Insurance Policy?
Determining if you can get an errors and omissions insurance policy is relatively easy.
It starts with filling out an application for E&O insurance, which typically will ask for information such as name, address, type of business, annual revenues and something about your business. An application may also require financial statements or management bios.

How are insurance premiums based?
Errors and omissions policies are based on a number of factors, including:
  • Type of Professional Services Provided
  • State where Services are Provided
  • Annual Revenues
  • Loss / Claims History
Small business owners need to remember that they could find themselves acquiring a cheaper policy that excludes all the professional services they provide. This of course would render the policy useless. Remember, defense costs are a significant portion of the cost of an errors and omissions insurance policy and a professional can easily spend thousands of dollars for a matter that ultimately is dismissed.
The premium for an errors & omissions insurance policy will be centered on several issues, including the limits of liability and deductible one selects for their marketing consulting company.
The majority of one- or two-person marketing firms will spend some $1,000 a year for $1 million in E&O insurance. For a large number of marketing consultants, it comes out to smaller than 1 percent of gross revenue. E&O policies typically have a claim limit and an annual limit, based on the policyholder's liability exposure. The claim limit is the maximum that will be paid for any one event, while the annual is the maximum that will be paid in any one year. Normal errors and omissions insurance claim limits vary from $250,000/$500,000 to $2,000,000/$4,000,000.
How do I find the right insurance agent?

Interview your agent, get references and determine their qualifications and understanding of the industry.

A professional liability agent or broker should have specific knowledge in dealing with your specific type of industry and have the requisite experience and insurance markets to help you.



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