Key Terms Of Errors & Omissions Insurance: From Binder To Tale Coverage Options
As a design professional it is important to have professional liability insurance for architects or engineers. General liability covers your business in the event that a client or contractor sustains an accident in your office. Your professional liability insurance or Errors and Omission insurance protects your from damages and losses resulting in oversights or design flaws that were introduced using your products or services. Understanding key terms and definitions of this coverage such as binder, Claims-made, and Mediation Deductible Credits, can help you select your policy and provider wisely.
Your engineer or architect insurance binder is a formal, written acknowledgement that the insurance is in effect although the policy has yet to be issued. This enables professionals to show proof of coverage though final paperwork has not been completed. Although it is not legally necessary to carry professional liability insurance, most prudent businesses do. Having this additional level of protection is a great way to grow your business and supply customer surety. Having you binder on hand gives you worthy evidence that can be presented to potential clients that shows that you have their long term best interests in mind.
Errors & Omissions insurance is often termed a claims-made insurance. This is because the claims must be filed while the policy is in effect. This is unlike general liability insurance which will typically acknowledge claims filed after the end of the policy as long as the event occurred before. There are numerous options that many different insurers offer, such as retroactive coverage that often must occur on or after a specified retroactive date.
It is also possible for insureds to receive generous deductions for settling a dispute in mediation rather than in court. This is called a mediation deductible credit. If a company is able to settle a dispute in mediation rather than court, many insurers reduce the deductible amount by half. The maximum for this reduction however normally caps out at $15,000.
There is a vast number of terms that help define the features and protections that Errors & Omissions insurance provides from the receipt of your binder until the end of your policies duration. Having a knowledgeable broker help you shop will enable you to take advantage of the phenomenal savings and protections that are offered by top rated insurers. Getting in the know about professional liability insurance will allow you to give your business what it needs to grow and thrive.