The right errors and omission policy can protect you professionally, covering legal costs if a mistake on the job leads to a lawsuit. To make sure you get the right E&O coverage, ask your agent these three questions.
1. Am I Getting Claims-Made Coverage?
If you have an E&O policy with claims-made coverage, it means you will only receive benefits if you have an active policy when the alleged incident happens and when the claim is filed. Why is this important? Because, if a previous client files a lawsuit years after you have cancelled your coverage, the policy will not cover you.
2. What Are My Limits?
Your coverage limit is the maximum monetary amount your agency will pay out in the event of a claim. Make sure your agent is offering you a policy with a total limit that reflects your business size and the type of work you do. Make sure the limit will cover any possible legal fees, court costs and so forth.
3. What’s My Deductible?
This is a good question to ask your agent and ask yourself, regardless of what insurance policy you buy. Can you afford a high deductible? Alternatively, do you believe the chances you will need to file a claim are great? If so, you might want to consider a low deductible.