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Saturday, September 20, 2008

Beware of Errors and Omissions Insurance

By George G Williams

If you are providing an insurance service you must consider the risk of being brought into court for a real, or not so real, lawsuit. Many professionals require specific E and O insurance geared to their particular industry. It all depends upon upon the industry, the state, size and of course, the history of the company. Any number of professional liability options are available. The company you select should maintain strong relationships with many carriers that can custom tailor a program for your organization. Brokers who maintain licenses and have relationships with brokers in all 50 states is your best bet.

Policies are issued on a Miscellaneous Professional Liability (MPL) form, which are often used by many E and Omissions companies. Often changes are required on these forms. Without changes, many policies are just plain inadequate to cover the typical risks of operating a business. Many times one will see excluded medical management, accounting or actuarial services, merger and acquisition services. For many business that may be sufficient, however, for a medical group to have medical management excluded from their policy would provide no coverage for their actual day to day activities..! Until there Gaps like this are unknown until there is a claim. Policies ust be specific to each company, and offer a "gapless" solution for each client. Example - An accounting firm. After taking a look at their E & O policy, it was determined that their policy specifically excluded accounting services. What?!? This sort of gap happens more times than one would like to see. It's buyer beware..!


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