The contract you work out with a professional liability insurance provider covers many important details that can have a serious impact on the future of your business. As a business owner or other professional, you are probably well versed in the practice of carefully reading over the fine print, asking questions to save yourself time and effort down the line, and thinking of the long-term in the present. All of these qualities will help you as you read over the final contract, consider the liability insurance claims process and verify that all of your company’s needs have been properly accounted for.
If your business is the sort that entails contracts of its own, you are familiar with the important, binding aspects of these agreements. While all contracts demand careful perusal along with checking and re-checking of the seemingly minor details, a contract that involves your professional liability insurance arrangement demands the highest tier of your attention. While it would never be in the best interest of an insurance broker to equip you with less coverage than you ideally need, there are rare instances in which a mishap in communication can lead to mistakes. For this reason, and because it involves the future financial stability of your business, do not hesitate to bring up any questions or concerns you have about the contract.
What the Contract Covers
The contract will spell out important details of the type of coverage you have opted for. While there is a general umbrella purpose of professional liability (sometimes called Errors and Omissions) insurance, there are many ways in which policies can deviate from one to another also. The standard purpose, which will be written out in detail on the contract, is the monetary protection of your organization if and when a claim is made against you on the grounds of improper function (error) or neglect (omission). This overarching theme statement of professional liability boils down to the fact that there are many unforeseen circumstances that can arise, often through no fault of your own, and can lead to allegations being filed against your company. Defending yourself against such allegations can prove extremely costly; E&O insurance helps out so that you don’t stand the same risk of losing valuable company resources in the defense process.
In addition to delineating what actions will be taken on your company’s behalf if claims are made, a contract will specific any provisions that are specific to your company type. For example, some software manufacturers or website creators are often outfitted with special provisions that go beyond a standard professional liability contract because of the nature of the work they perform. You contract will also specify whether your insurer will help in securing a legal defense for you in any way other than monetarily (some insurers will actually contact a lawyer and arrange for council on your behalf).
Help in Understanding
This is one area where you will want to do as much research on your own as possible so that you feel assured and at ease when the contract is signed. If there is a lawyer you already turn to for other matters involving your company, you may possibly want this attorney to take a look over your contract. However, you will most likely find that your insurance broker will patiently answer any questions that you have in as much detail as you would like. If you have any small or large concerns when you begin reading your professional liability insurance contract, make sure to bring them up in order to ensure that any problems are immediately taken care of.