E&O insurance is an isolated branch, but a few others offer the additional coverage of this product. Some specific situations, however, have specific civil liability insurance like the activities of freelancers and self-employed executives.
E&O insurance has a more complex hiring process because of the wide range of risks, depending on the professional activities and the possible consequences of the decisions taken by the executives of a company. It is a civil liability insurance designed to cover the risks of self-employed and executive professionals.
There are E&O insurance policies which cover the damages caused to third parties due to failures, malpractice and negligence committed in the exercise of the profession. It is the type of insurance used by doctors, dentists, engineers, brokers, notaries, etc.
The directors and managers of the companies, in turn, have the D&O insurance, which guarantees damages resulting from the eventual decision-making of these senior executives. It is a protection to the personal patrimony of the executive in lawsuits filed against the individual, arising from the acts of his/her management.
The professional E&O insurance policies are individualized with completely different clauses for the reason that they cover different risks. The continuous creation of the new professional classes from technological areas, from health to legal ones does not allow the generalization of professional insurance coverage.
The contracts for these products have become quite specific. For example, an attorney’s E&O insurance policy includes indemnification for the economic and financial loss of the client due to deadlines, lack of process follow-up, etc. A doctor’s E&O insurance policy includes the compensation to the patient for errors or malpractice.
For each area of professional activity, there are specific policies. The insurance broker can assist you with the choice and definition of what is most appropriate. Its exposure to the probable risks is analyzed and identified with presentation of appropriate coverage to eventual indemnifications.
Each contract is structured in a personalized manner according to appropriate type and limits of insurance against errors and omissions and also against decisions of executives that will be questioned in the court.
The company-sponsored E&O insurance to protect its executives serves to cover the repairs and expenses incurred in court proceedings based on the decisions they have made in the management of the company. Estimates indicate that from three to four thousand companies have policies like these. The cost ranges from $3,000 to $5,000 for every $1 million in coverage.