Business owners often incur claims resulting from negligent acts, errors, omissions, or personal injuries arising from professional services. The insurance products specifically tailored to these types of claims are called Professional Liability or Errors & Omissions insurance. Moreover, certain industries are more susceptible to these types of claims. Some of those impacted are: accountants, architects, engineers, financial or insurance consultants, lawyers, physicians and other medical professionals, computer infrastructure firms, among many others. Many factors that differentiate those from other business owners are the skills, knowledge, experience, and reputation in a specific industry vertical. In fact, if one has independent contractors working on one’s behalf, it is increasingly becoming more important to ensure you’re properly protected from potential acts of negligence attributed to or stemming from them. Common questions to ask are:
- Is a business consulting for individuals or other businesses?
- Is advice being given to people in a manner where there is an expectation of material gain?
- Are financial or professional recommendations being made to others?
- Is a trust or a charitable entity making decisions based upon choices made by a Director or Officer of the company or Board of Directors?
- Is a bond for work being performed in a fiduciary capacity in place?
- Is there concern that immunity statutes may not provide any protection for the organization?
Non-profit organizations are seeing an increase in claims brought against their directors, officers, trustees, employees, volunteers and members. Some commonly known “non-profits” are sometimes referred to as 501(c)(3) or 501(c)(6) organizations. These organizations might also have limited resources to indemnify those claims. If an entity is qualified as a non-profit, the proper insurance is required to respond to expensive litigation, settlements or damage awards for negligence. The insurance products recommended for these types of organizations go beyond the basic General Liability and Property Insurance products in the marketplace. They need E&O, D&O, Workers Compensation, and EPLI among some others.