If you have been researching errors and omissions insurance to educate yourself on whether or not you have a need for this type of business liability insurance, you have made the first step to protecting yourself and your business. As you may have found, E & O Insurance is necessary for all professionals who offer advice, education, and consulting services. Simply put, if you have received continuing education, licensing, or extended training to provide services to your clients you will have a need for errors and omissions insurance. Now that you understand, you need this type of insurance and that your basic general liability insurance excludes the coverages that are offered by professional liability insurance, you may be asking yourself how much policies cost on average. Several different factors play a role in rating an e&o insurance policy. Understand what underwriters consider to calculate your rates.
The first thing that is considered when calculating your premiums is your profession. The type of professional services you provide to the community will play a large role in how much your premiums are. The more risky your profession, the more your premiums will be. For example: If you are an insurance agent looking for Insurance Agents E & O Insurance you will likely pay less than a legal professional looking for malpractice insurance. While both of these insurance policies are a form of professional liability insurance, legal professionals have more risk of filing a claim than insurance agents do.
In addition to the services you provide, the insurance underwriter will also consider the state where the services are provided. If you operate in a single state, your premiums may be lower than those who operate in multiple states. In addition, if you are doing business in a litigious state that has a high ratio of lawsuits involving professional liability, your rates may be higher. It is all based on statistics, just like with other forms of insurance.
The number of professionals being covered and the total revenues of your firm will also play a role. If you are covering more than just yourself, you may pay more to cover professional representing the entire firm. The amount you take in on an annual basis can also play a role because it says a lot about your customer base and the type of business you do.
As with any form of insurance, e & o insurance will require a loss history and claims history report. If you have never had insurance, you will be rated as a first time policyholder. If you are switching companies, you will need a letter of experience from your previous provider. Know what underwriters are considering when calculating your premiums and bind coverage as soon as possible.
