••••••>How to Protect Your Company with E&O Insurance In today's business world, companies providing products or services to third parties need protection beyond their general or business liability insurance policies. Among other perils, standard GL policies respond to claims or lawsuits made by third parties for bodily or physical injury to, or loss of use, of tangible property. However, due to the impaired property exclusion, GL policies do not provide protection for claims when the insured's product fails to perform without physical damage accompanying that failure. In addition, GL policies do not respond to claims for injury to intangible property, such as damage to data. Without Errors and Omissions insurance, other financial losses suffered by one of your customers can be detrimental to your company's bottom line. Companies at Risk: Companies that should purchase E&O insurance policies include those that: • • • • • •
Manufacture, assemble or install to customer specifications Provide design work Select raw materials for others Provide services, advice or instructions to others for a fee Subcontract work Print, package or deliver materials for clients
Securing Insurance: You will need a computer, internet connection, and phone if you want to start your hunt for a provider of such insurance. The only way to limit your corporation’s liability with potential errors or omissions is by securing Errors and Omissions insurance. Moat insurance providers prefer working with businesses that have been around for more than a year. Try to talk with quite a few agents so that you can identify the best deal. You need to find an airtight insurance policy that is crafted to meet the individual needs of businesses. Make sure that you discuss the different aspects of your corporation especially the ‘needs’. Do not forget to describe your services or products so that the right policy can be structured to meet such needs. Fill out the application form and comply with all the requirements especially in the submission of certain documents. Oftentimes, this will include submission of tax returns, balance sheets, business license, and other documents. You have to ensure that your policy is always active and try to avoid incurring lapses. Take note of the expiration term of your policy and reactivate it when needed. If you do not have any lapses, the insurance provider will be more than willing to have your coverage reactivated in 30 days.
In today's business world, companies providing products or services to third parties need protection beyond their general or business liabil...