What You Need to Know to Save Money on Your Tail Coverage
Error and omission insurance pays for settlement and legal defense costs in the event that a client claims your professional errors caused them a financial loss. Here we will discuss how to find an appropriate tail coverage cost for your business.
Reducing Coverage After a Client Relationship Has Ended
One of the most costly choices you can make after you have settled the score for your client to firm relationships is to completely remove your error and omissions coverage. The time frame that allows a client to make a claim may not expire for years after your dealings as determined by its statute of limitations.
Purchasing a new policy after the claim has been made won’t cover the losses, even if there was coverage at the time of the client to firm dealings. That’s why it’s important to tailor the entire policy to fit within your budget at startup instead of removing it later on. Here are the risks you get protection from under an error and omissions insurance.
-Failing to provide accurate information -Inaccurate diagnostics or inspections-False promises or misleading information-Documentation mistakes or missed filing dates
Buy As Much As You Can Afford
The way tail coverage cost is determined is based off your current premium, so there are several personal background details that make up the underlying rates. Since average settlements average around $18,000, you may want to purchase as much coverage as you can afford.