Well, hot dog! You're ready to shield your business from the high cost of unpredictable lawsuits that arise from the work you do for others. So now you've decided to invest in Errors and Omissions Insurance.
To get started, you can fill out a simple insurance application (a process that will take about 10-30 minutes, depending on your business details). This guide will walk you through the steps involved, the information you'll need, and what to expect.
E&O Application Overview: How Your Provider Assesses Your Risks
Errors and Omissions Insurance (aka E&O Insurance, Professional Liability Insurance, or Malpractice Insurance) covers your legal expenses if a disgruntled customer sues you over your services. Whether your company was in the wrong or not, E&O Insurance covers the cost of litigation and puts the hassles of a lawsuit in the hands of your insurance provider.
In order to determine your business's risk of facing a lawsuit, your E&O application will ask for the following types of information:
- Details about your company's organization.
- Revenue and payroll data.
- Information on how your company uses contracts.
- Potential corporate entanglements.
- Insurance and legal history.
E and O Application Step 1: General Small Business Information
Throughout your E&O Insurance application, you'll be asked to provide details about your business. Be prepared to specify…
- The contact information (address, phone) for each of your company's locations.
- How many employees you have (including yourself) and their status (full-time, part-time, etc.).
- The date the business started (under current ownership).
- A brief description of what your business does.
- How your business is legally organized (sole proprietorship, LLC, S corporation, partnership, etc.).
- The types of work your business does.
E&O Application Step 2: Financial Data
The more revenue your business generates, the more assets you need to protect from potentially devastating lawsuits. To find out how much coverage your business needs, you'll be asked to supply the following financial information:
- Your business's revenue for the current fiscal year.
- Estimated or projected revenue for the next fiscal year.
- The amount of revenue you get from your largest client.
- Total payroll expenditure.
- How many officers or owners you have and their compensation.
E and O Application Step 3: Your Contracts
Contractual promises can both create liability and lessen liability exposure. In addition to the actual content of your contracts, the following variables will impact your E&O quote:
- If you use subcontractors, do your contracts require them to carry E&O Insurance?
- How often do you use written contracts with clients (by percentage)?
- How often do you modify your written contracts?
E&O Application Step 4: Corporate Entanglements
If you or your company is involved in other business ventures, you may face legal complications that increase your liability exposure. In order to determine how the complexity of your corporate landscape might affect your E&O risk, the application will ask…
- If a member of your company owns 3 percent or more of one of your clients.
- If you or your company owns 51 percent or more of another business.
If either of those describes your situation, you'll be asked to provide details regarding those relationships.
E & O Application Step 5: Your Insurance and Claims History
Expect your E and O application to ask certain business insurance-related questions, such as…
- What other policies has your company carried in the last 12 months?
- Have you carried E&O Insurance before?
- What claims were made under your previous or current insurance policies?
- Do you know of any incidents that might lead to a claim against your company in the future?
Applying for E & O Insurance: Tips and Notes
Insureon's E and O Insurance application is clear and easy to fill out. As you're going through the web-based forms, here are some tips that'll help your experience go smoothly…
- Know the coverage limits and deductible amounts you'd like; you'll be asked at the end of the application.
- When entering dollar amounts, you don't need to include the dollar sign.
- Answering certain questions “yes” will unveil more questions; the application adapts to your answers.
- To return to a previous page in the application, use the arrow at the bottom of the page rather than your browser's “back” button.
- When you enter your contact information, you'll receive an email with a password. If you don't complete the application at one sitting, you can always come back to your saved information by signing in.
After filling out your application, you'll receive insurance quotes tailored to the needs and risks of your small business. Read “E&O Insurance Quotes and Estimates: What Small Business Owners Need to Know” for more information.
Apply for E&O Insurance Today
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