Errors and Omissions Insurance
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Because of their arrangement with the people they enlist for other agencies, there are plenty of legal issues that could surface for a staffing firm. This is certainly a concern that should be addressed before an unpleasant situation arises. With all of the various state and federal laws that govern employment relationships, staffing firms face an endless number of legal pitfalls and therefore need to secure employment agency insurance to protect the company, its clients and its workers.
Staffing firms are in a very unique position. They provide sound solutions for client companies seeking to manage their own legal risks associated with their employees, but in certain situations, where there is the potential for workplace discrimination or harassment suits, staffing firms and their clients have exposures significantly different from a standard business operation. These issues are due in part to the enormous amount of turnover, and the constantly changing landscape.
Employment practices lawsuits aren’t that uncommon
Discrimination complaints filed with the Equal Employment Opportunity Commission (EEOC) can lead to expensive litigation or costly settlements for a staffing firm. Because of this fact, more attention is now being focused on employer practices related to background checks. Businesses can face individual or class litigation suits if background checks and hiring tests result in screening out protected classes, such as minorities, at a higher rate than other groups. The EEOC has renewed its emphasis on enforcing actions from complaints in this area, and individuals continue to bring about claims based on background check screening.
These agencies often enlist recruitment offices to help supply them with job candidates, and being a business, they run the risk of sending applicants to clients who may not actually be a perfect fit for the position. Naturally, this is done in order for them to get paid and move on to their next client.
Among the many complaints made by applicants are that they may feel like they’re being pushed into positions they aren’t qualified for and companies that aren’t necessarily a good match for them,simply because the recruitment office hired by the temp agency wants to earn credits for placing these individuals quickly. There is an awful lot of risk involved in recruiting employees for different companies, and maintaining employment agency insurance is one way to mitigate many of these risks.
Businesses of every type and size require insurance to protect assets and help pay for any damages incurred during their operations. For example, if you’re in the consulting sector, or are a provider of expert advice, you likely are going to need to purchase NY errors omissions insurance (E&O) in the event you are sued for a negligent act.
This is professional liability insurance that covers anyone who considers themselves an expert in any of several fields, and as an expert provides advice or consulting services. If a client sues for financial damages due to having their project fall far below expectations, based on advice or recommendations they received, your E&O policy covers you for any legal fees and defense costs incurred. For a reasonable price (around $1,200.00 per year), depending on your profession and the scope of the plan, you could have up to $1,000,000 worth of professional liability coverage or more.
The challenge when working as a consultant is that your client may seem perfectly happy with the work you submit, but six months later, that same customer may not be happy with the performance of a service, program or project you provided or implemented. He or she may even specifically allege a functionality failure that has caused financial damage or loss of income. If you can’t come to some sort of an agreement with a satisfactory resolution, the customer may not only terminate the contract due to negligence, but sue for damages as well.
Look, mistakes happen, and unfortunately we live in a highly litigious environment. As it happens, sometimes things slip through the cracks and you can’t personally attend to every single detail of every job. You don’t want your business to suffer simply because of an erroneous assumption that was made.
Dealing with the stress of litigation can be mentally exhausting and financially damaging as well. These are the types of situations that can distract you from doing your best work. With NY errors omissions insurance you can actually relax, knowing full well that any potential liabilities will be covered in the event of a claim.
Real estate agents need coverage that protects them against financial losses from lawsuits filed as a result of any work performed in their profession. Errors and omissions coverage, called E&O for short, is the name associated with real estate liability insurance, which describes a type of malpractice insurance carried by most real estate professionals.
As carefully as you may carry out your duties, you may be at risk of a claim. You can even be held liable in a court of law, even from lawsuits without merit. Lawyers must be paid no matter who wins in court, and the legal expenses alone can be devastating to your finances. Fortunately, when you have E&O coverage, the insurance company defends the claim and pays any settlement or judgment against you up to the limits of liability stated in the policy. This is what makes having coverage so essential.
What does a typical E&O policy cover?
Policies can differ from one insurer to the next, so when trying to decide what type of policy you should purchase, you can use these very basic ideas about standard types of coverage. Most E&O policies cover claims that come about due to error, omission, or negligence in regard to your duties as a real estate agent.
Some common E&O exclusions
- Claims resulting in dishonest or criminal acts by you
- Claims associated with polluted property
- Claims against you if you cause bodily harm or death to another person
- Claims arising from damage you cause to someone’s property
Remember that it’s important to keep accurate records of all transactions. Keep records of all phone conversations that discussed anything pertaining to a sell or purchase. For example, you should note the buyer response to your question about whether or not they wished to purchase home warranty protection. Did a buyer decide not to do a home inspection against your recommendations? Write this down and put it in your file.
It’s not at all uncommon to ask your buyer or seller to sign a statement that you recommended a specific action. If your files contain a signed waiver, you cannot be held responsible for any problem related to the waiver. Document as many facts as possible during your real estate transactions that could help you later if your client becomes unhappy about some aspect of the sale. Having real estate liability insurance is the best protection against mistakes made or groundless accusations.
Errors and omissions coverage is essential to just about every industry. Without these protections in place, business owners may face costly lawsuits as the result of one dissatisfied customer or client. That’s why it’s important to select a suitable E&O wholesaler when considering prospective insurance options.
Why Errors and Omissions Is Important
In the world of business, mistakes can often occur without warning. If these mistakes involve services rendered to customers, they can quickly result in court proceedings and pricey defense costs for all involved.
That’s where errors and omissions insurance comes in. An E&O policy affords a business the necessary funding to handle legal issues related to allegations of poor service. Such financial support is crucial for a business to remain operating while dealing with legal fallout stemming from customer dissatisfaction.
All Businesses Must Have an E&O Policy in Place
No matter the industry, all businesses should have some form of errors and omissions coverage in place. This includes high-profile professionals, as well as smaller businesses affording much-needed services to the general public.
Even the most competent businesses can run into issues from time to time. By implementing the right insurance policies, these issues can ably be addressed without sacrificing the business as a whole in the process.
Protect What Matters Most
The right E&O wholesaler can provide your clients access to superior insurance products intended to mitigate risk in every form. With such protections in place, all businesses can retain the ability to thrive, even in the midst of allegations that may lead to exorbitant lawsuits.
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Insurance agents understand all too well the many challenges they face when selling their services and products to consumers. A misplaced word here, an exclusion of important information there, and they can end up in a court defending their actions, and could ultimately end up paying out a large settlement for an unfortunate and unintentional error.
E&O insurance for insurance agents can help with the burden of litigation should a customer decide that they are unhappy with the results of either their purchase, or an incident that took place for which they believed they were covered, only to discover that they were not.
Types of concerns and exposures faced by insurance agents
One example of a routine exposure many agents face has to do with quote sheets. The exposure lies in the possibility that, if one customer service representative (CSR) uses a quote sheet that does not ask an important question, and this results in an insured not purchasing adequate coverage, whereas another CSR’s quote sheet would have asked the appropriate question, an invariable practice standard has been violated. The plaintiff attorney would point this out in a court of law and there would be little or no defense against the accusation.
Another area of concern is when a CSR ends up being behind on a client’s policy renewals, which can create significant E&O exposures, such as missing errors and making mistakes in an attempt to try to rush through the process or, even worse, delivering their policies late. If a policy is delivered late, any “duty to read” responsibility on the insured’s part is heavily diluted.
An agency’s Standard of Care requirement is a complicated matter in itself, because the applicable standard is case and fact specific. When an agency charges fees in many, and probably the vast majority of jurisdictions, it elevates its Standard of Care requirements considerably. A key to meeting this higher standard likely involves new procedures and much tighter monitoring of whether these procedures are being followed in order to avoid situations that could result in litigation. These are prime examples of why E&O insurance for insurance agents is a necessary and vital product to have.
photo credit: citirecruitment cc
However talented or dedicated they might be, real estate agents are only human. And just like everyone else, they can make mistakes. In situations that involve land sales, housing, and other large transactions, mistakes made in real estate can lead to losses of several thousand or even millions of dollars for both the companies and the clients. Real estate errors and omissions insurance, however, can provide coverage for when things do go wrong.
Errors and omissions insurance is also called professional liability insurance or professional indemnity insurance. It is used in cases where a client believes that a service (or failure to provide service) from a company has hurt them financially. In the medical field, this is often called malpractice, although it can be used in almost any service industry—ranging from shipping to accounting to real estate.
Problems and Pitfalls
Real estate errors and omissions insurance protects against human error. For example, if a property’s acreage is recorded incorrectly, or if broker forgets to recommend a home inspection and problems are discovered after a home is sold, clients may sue the real estate broker. Restitution, settlements, and legal fees can cost quite a bit and may even put an agency out of business. Even when claims are groundless, lawyers aren’t cheap.
Where or not the client has a basis for their complaints, lawsuits because of simple mistakes can happen to any company. Real estate errors and omissions insurance can protect a firm from angry clients, court battles, and financial loss.