Business insurance is designed to protect your business from unknown accidents and losses. Many businesses many not take the time to understand many of the unique risks they might have. That is why an agent can help you not only understand your risk but develop and design a program to address your risks.
Did You Know?
Many business professionals many not have thought of these coverages, but they should.
Cyber Liability Insurance can be added to your program to cover the costs associated with customer notification and recovery of hacked data. If you store data, including private information on computers, use e-mail, generate revenue online, or use your computer to control production, manufacturing, or inventory, your company is at risk! In short, any business not making a serious effort to protect personal private information is seriously out of step with the emerging landscape of privacy law.
Employment Liability Insurance provides protection for an employer against claims made by employees, former employees, or potential employees. It can cover discrimination (age, sex, race, disability, etc.), wrongful termination of employment, sexual harassment, and other employment-related allegations.
Professional Liability Insurance pays for damages caused by services. It is also called “errors and omissions” coverage. This insurance is for companies that market a service instead of a product, just as professionals in medical clinics must have medical malpractice coverage.
Directors and Officer’s Liability Insurance helps protect your business, owners, executives, and managers, if individuals, competitors, third parties, or government regulators make claims. A lawsuit against directors and officers most commonly occurs when shareholders (private or public), clients, competitors, or others feel they suffered a loss in the value of their shares because of actions that the board or senior management took or did not take.
At Emerge Insurance Agency, we can design an insurance program package to meet your company’s property and liability needs. Our goal is to provide you with the best possible combination of coverage, price and service.
EMERGE INSURANCE AGENCY
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
Cecil Williams -