Errors and Omission Insurance for the Professional

Errors and omission insurance can be thought of as liability insurance for a business. It is a type of insurance that business professionals purchase in order to insure them against paying high legal fees for legal defense that results from lawsuits due to a mistake they may make that causes a client to incur financial losses. This type of insurance is carried in addition to general liability and standard property insurance. Professionals that purchase this type of protection include architects, financial brokers, and real estate agents. This insurance is recommended for individuals in a profession in which mistakes could cause a client to suffer financial losses.

Another type of errors and omission insurance is known as medical malpractice insurance. It is a well-known type of insurance purchased by medical professionals such as doctors, nurses, dentists, and chiropractors. It protects them from damages that are awarded to a client in a lawsuit. Malpractice is negligence or a breach of duty in circumstances where the professional has a responsibility to act in a certain manner and fails to follow standards of their profession, and where the client suffers harm or loss.

Legal malpractice is another instance where the protection from liability offered by insurance can protect a practicing attorney from losses due to a failure to fulfill a contract, a breach of fiduciary duty, or negligence, which causes some type of harm to a client. For a client to bring a successful case against a law professional, they must prove that some type of harm was the result of an error that an attorney would not normally make. An attorney must be found to have neglected fiduciary duty to a client, and has chosen to act in their interest rather than that of the client resulting in harm to the client. A good example is a situation in which an attorney has missed an important deadline that causes a client to lose a case as a result.

In addition to the various types of errors and omission insurance that have been mentioned above in this article, a surety bond is a type of protection that a business professional must, sometimes, consider. There are three parties involved in this type of protection. The three parties include the principal, the surety, and the obligee. The surety provides a guarantee to the obligee that the principal will fulfill all obligations that are required of them. The principal must pay a premium for a surety bond. If the principal fails to fulfill a portion of the agreement, the amount of the surety bond is awarded to the obligee. The types of liability insurance discussed in this article represent just a few types of the many that are utilized by individuals in the various professions.

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