 Consultants are hired to help companies be the best they can be, and if you don’t show that you’re making your business the best it can be, what does that say?
If it’s a business and not a hobby, there’s no way around it the company needs professional liability insurance. Your business, future, and personal assets aren’t protected without it. It’s one of the most important business investments a consultant can make, and although you may see it as an extra expense, it’s a small expense compared to what it could cost you without it. What Is Professional Liability Insurance, and What Does It Cover? Professional liability insurance, sometimes called errors and omissions insurance (E&O), provides protection for businesses from risks not usually covered under general commercial liability insurance, which are two different kinds of policies. Getting errors and omissions insurance as a consultant is much like doctors obtaining malpractice insurance. Like malpractice insurance, professional liability insurance should be a standard insurance product any business owner and/or consultant has. Basically, E&O insurance covers anything you or your employees do that causes losses or damage. Some covered acts include:
Risks Consultants Face Consultants face a variety of risks purely because of the wide variety of services they offer. The risks largely depend on your specialty. For example, PR consultants may face risks of defamation and slander lawsuits, while human resource consultants could face risks of hiring someone who shouldn’t have been hired for obvious reasons. Any consultant can face the risks of being sued for tiny errors like those made in data entry. Okay here’s a common example. Assume you have a technology consultant company and an employee suggests a certain billing system to a client, but this system fails to make an abundance of charges because your employee put some incorrect information into the system, costing the client a loss of hundreds of thousands. The client expects you to make up for that loss. Without E&O, hopefully you have several hundred thousand dollars (or more) and can immediately write a check. If you had E&O insurance, you’d be covered as long as there weren’t intentional acts to cause damages or losses. The insurance would help cover losses, court costs, or legal fees. Regardless of how much experience you or your employees have, what awards you’ve won, your education, or size of your business, the bottom line is that you and your employees are human, and humans make mistakes, intentionally or not. Unfortunately, one tiny mistake can cost greatly. The Risks of Not Having E&O Insurance In addition to the regular risks consultants face, the mere absence of E&O insurance presents risks, including:
Furthermore, you probably won’t hear companies that initially asked for coverage proof say “When you bring me proof of coverage, I’ll choose you.” Usually they’ll just write you off completely when you say you don’t have it. Remember that word of mouth is the most powerful marketing tool. If word is that clients can’t trust what would happen if there’s an error, word of mouth can be your enemy. Worse yet, if you caused damages at one company and couldn’t cover the losses, how many clients do you think will be inviting you into their companies? There goes new business. If word of mouth reaches current clients, there’s a chance they may release you. There goes present business. Past clients may not ever use you again after learning about such scenarios. There goes old business. Do I Have to Have It and What Happens If I Don’t Get It? If you don’t purchase this kind of insurance, you’re gambling not only with the business investments you’ve made, but with personal assets as well. If a judgment was made against you, and you couldn’t pay it, you could end up having personal assets seized, like your home, savings, or others. Consultants are hired to relay their expertise and skills and help guide something to success. While it may not be state or federally mandated like auto insurance, you’ll likely have to show proof often, so having it helps establish you as a serious professional taking the right precautions. If you won’t invest in your own business, it looks like you doubt its value and as though you don’t take it seriously. Why would clients take you seriously if they think you don’t? Having E&O tells clients you’re dedicated to rectifying mistakes, responsible, and assures them they’re financially protected if your business causes them loss. The companies you’re working with most likely have protection, and they assume responsible businesses do also. Prices vary according to the size of business, location, amount of coverage, and business specialties. If you’re concerned about cost, remember this: if a lawsuit is brought against you without E&O insurance, all personal and business assets can be seized to pay for judgments. That will certainly be more expensive than annual premiums on E&O policies. EMERGE INSURANCE AGENCY 904-677-5884
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 If a fire, flood, hurricane, or some other natural disaster were to destroy or damage your home, would you have the right insurance coverage to rebuild your house?
These series of posts are based on the questions consumers most frequently ask, explains what is covered in a standard homeowners policy and what is not. Where gaps in coverage exist, it tells you how to fill them. To simplify explanations, we assume that you have a policy known as Homeowners-3 (HO-3), the most common homeowner’s policy in the United States. Find out what type of homeowners policy you have. If you have a different policy, you should review your options in question #17. Question # 4: Am I covered for flood damage? Answer: No. So, if you live in a flood-prone area it may be wise to purchase flood insurance. Flood insurance is provided by the federal government, under a program run by the Federal Insurance Administration. In some parts of the country, homes can be damaged or destroyed by mudslides. This risk is also covered under flood policies. Contact your agent or company representative to get this insurance or call the Federal Emergency Management Agency at 1-800-427-4661 or visit its Web site at www.fema.gov. YOUR CAN GET FLOOD INSURANCE FOR LESS THAN $400/YEAR!! Call us now for a quote on your home. Okay, our next post of common questions asked will be Question # 5: A pipe bursts and water flows all over my floors. Am I covered? A current concern if you have enough protection for your home – call us. EMERGE INSURANCE AGENCY 904-677-5884  What should you look for when hiring someone to work on your home or property?
The State of Florida does not license or regulate handyman practitioners, although some local jurisdictions may. Therefore, a handyman is only able to perform minor repairs (e.g., general cleanup, painting, fence repairs, trim work/repair and hanging/repairing sheet rock/wallboard, etc.), and cannot do any structural work, such as laying foundations, removing or adding structural walls, performing room additions, plumbing or electrical work. When a handyman moves from the realm of minor repairs to structural repairs or construction work that he or she is not authorized to do, they are entering the area of unlicensed activity and are subject to prosecution. Realtors often hire handymen to make repairs to properties they list for sale. This is legitimate - provided the handyman makes only minor repairs (as outlined above) that do not fall under the scope of work of regulated licenses (outlined in Section 489.105, Florida Statutes). When shopping for home repairs, the first criteria that should be met are:
Check with your local building department to ensure whether handymen are regulated within their jurisdiction. Next, make sure he or she has an occupational license – you don’t want to risk having your local building department place a stop work order on your project when it is half completed. Proper liability and workers’ compensation insurance coverage is of equal importance. Suppose your handyman backs into your neighbor’s privacy fence, damaging two sections, while delivering materials to your job site. Should you or your insurance company pay for the repairs? You will if your handyman doesn’t have insurance. Let’s use a more extreme, but common, example. Your handyman falls off a ladder while making repairs to the ceiling of your front porch. He falls through your plate glass window, suffering severe lacerations and breaking his arm. If he is not insured, who will pay his lost wages (workers’ compensation) while he is recuperating, and for the replacement of your plate glass window (liability)? You will. Your liability could be indefinite if he suffered restricted use or loss of mobility in his arm as a result of the fall. Think about this scenario as you prepare for your next repair or remodeling project. Ensure that the project is properly permitted at the local building authority. You, the homeowner, could be fined, have your project stopped, or both, if it isn’t. Don’t let a handyman talk you into pulling the permit, even if it will save you money. The person pulling the permit is responsible for any code violations, and correcting them may cost you extra. Only the homeowner or a properly licensed practitioner, whose license is recognized by the building authority, or his designated representative, may pull permits. Permitting protects you and your neighbors by ensuring that your project meets the building specifications for your area. A "handyman" trade is not one of the 22 construction-related licensing categories regulated by the State of Florida. Therefore, if you choose to hire a handyman, you will not be covered under the umbrella of protection of Florida Statutes. Section 489.113(2), states “This statute does not affect the application of any local construction licensing ordinances." Again, one should contact their local building department to check those credentials. But always play it safe and only hire properly licensed people to work on your home. To check to see if a contractor is properly licensed, log on to www.myfloridalicense.com and search for the Department of Business and Professional Regulation or call us at (850) 487-1395. EMERGE INSURANCE AGENCY 904-677-5884  Hurricane season starts June 1. Now is a great time for small business owners to start planning for the possibility of a hurricane this year. A great disaster planning resource is the PrepareMyBusiness.org website sponsored by the Small Business Administration (SBA) and Agility Recovery.
PrepareMyBusiness.org contains lots of great information on planning for different kinds of disasters as well as what assistance you may be able to receive from the Small Business Administration (SBA) should a disaster occur. You will also find information about the services offered by Agility Recovery, which is a reputable disaster planning company in insurance circles. I especially like the Hurricane Preparedness Guide. Take a few minutes to review PrepareMyBusiness.org. We are sure you will pick up a couple of good ideas so your small business will be ready for the next hurricane. EMERGE INSURANCE AGENCY 904-677-5884  If a fire, flood, hurricane, or some other natural disaster were to destroy or damage your home, would you have the right insurance coverage to rebuild your house? These series of posts are based on the questions consumers most frequently ask, explains what is covered in a standard homeowners policy and what is not. Where gaps in coverage exist, it tells you how to fill them. To simplify explanations, we assume that you have a policy known as Homeowners-3 (HO-3), the most common homeowner’s policy in the United States. Find out what type of homeowners policy you have. If you have a different policy, you should review your options in question #17. Question # 3: If my house is totally destroyed in a fire and I have $150,000 worth of insurance to cover the structure, will this be enough to rebuild my home? Answer: If the cost of rebuilding your home is equal to or less than $150,000 you would have enough coverage. The HO-3 policy pays for structural damage on a replacement cost basis. If the cost of replacing your home is, say, $120,000, then that is all the insurance you need. On the other hand if the cost of rebuilding your home is $180,000, then you will be short $30,000. If you live in an area that is frequently hit by major storms, ask you insurance company about an extended or guaranteed replacement cost policy. This will provide a certain amount over the policy limit to rebuild your home so that if building costs go up unexpectedly, due to high demand for contractors and materials, you will have extra funds to cover the bill. If you choose not to rebuild your home, you will receive the replacement cost of your home, less depreciation. This is called actual cash value. You should make sure that the amount of insurance you have will cover the cost of rebuilding your house. You can find out what this cost is by talking to your real estate agent or builders in your area. Do not use the price of your house as the basis for the amount of insurance you purchase. The market price of your house includes the value of the land on which the house is situated. In almost all cases, the land will still be there after a disaster, so you do not need to insure it. You only need to insure the structure. Okay, our next post of common questions asked will be Question # 4: Am I covered for flood damage? A current concern if you have enough protection for your home - call us. EMERGE INSURANCE AGENCY 904-677-5884 |
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