You never want to have to make a claim on your errors & omissions (E&O) insurance. However, you have the policy for a reason. You hope that nothing happens, but the coverage can step in to help you if a client ever sues you. A variety of your professional mistakes might lead to these lawsuits or claims. You have to be ready, just in case. Here are a few things to consider.
E&O Policies in General
E&O insurance covers the professional mistakes that you make that harm others. It is a type of liability insurance.
So, if you are a CPA, for example, and give someone incorrect tax advice, then they could sustain financial losses. They could blame you, and might even sue you for your losses. E&O insurance can help you compensate the affected party for their losses.
When to File a Claim
You generally should call your E&O insurance agency as soon as you know that you have made mistakes. Regardless of whether someone has sued you yet, getting a head start might save you time. Your agent can help you determine what your next steps should be if a suit does arise.
As soon as you have any inkling of trouble, let the agent know. They will bring you up to speed on where your policy will help out. You don’t necessarily have to start the claim, however, by calling your agent you'll be ready just in case. Most E&O policies will cover settlements, judgement and legal fees that might arise.
All the same, your policy will include limitations, such as its maximum limits and restrictions on covered scenarios. Your agent can therefore let you know of any potential roadblocks ahead of time. You'll be ready just in case a problem arises.
Gathering Information for the Claim
Filing the E&O claim will take time, and it will likely be an ongoing process. Initially, you'll need to take a few steps:
- Gather information that might relate to the incident in question. For example, if you have records of emails or phone calls between you and the claimant client, keep these in one place. Your agent can tell you if they need specific information
- Ensure that your policy is up-to-date. You will want to make sure that it reflects yours and your business's information correctly.
Finally, ask your agent what will happen if a lawsuit arises. Sometimes, E&O claims do not ever become lawsuits. However, if they do, the policy will make accommodations for the process.
If you have more questions about E&O Insurance, call Mitchell and Mitchell at (888) 512-8878 today!
Also Read: How E&O Insurance Can Help You During Lawsuits