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Professional Liability
Professional liability insurance is especially important for businesses for
whom incorrect advice or a failure to perform professional services could
lead to a lawsuit. Even if you haven’t made a mistake, you can still be sued.
A professional liability insurance policy should cover legal fees and protect
you and/or your business from crippling costs.
whom incorrect advice or a failure to perform professional services could
lead to a lawsuit. Even if you haven’t made a mistake, you can still be sued.
A professional liability insurance policy should cover legal fees and protect
you and/or your business from crippling costs.
Errors and Omissions Insurance
Errors and Omissions Insurance coverage is not included in any Commercial
General Liability policy, and to not carry it may put you and your company at
grave risk. Every company makes mistakes. Its inevitable. Errors and
Omissions Liability Insurance protects you and your company from claims that
arise when your client holds you responsible for the failure of your work to
perform as promised in your contract. Additionally, Errors and Omissions
coverage defends the mistakes of any employees or independent contractors
that you may employ. It is important to distinguish that Errors and Omissions
Insurance is concerned solely with performance failures and negligence in
respects to your products and services-- and not with the performance and
duties of your management. As such, it is a good idea to carry both Directors
and Officers Liability Insurance and Errors and Omissions Liability Insurance.
Errors and Omissions Insurance coverage is not included in any Commercial
General Liability policy, and to not carry it may put you and your company at
grave risk. Every company makes mistakes. Its inevitable. Errors and
Omissions Liability Insurance protects you and your company from claims that
arise when your client holds you responsible for the failure of your work to
perform as promised in your contract. Additionally, Errors and Omissions
coverage defends the mistakes of any employees or independent contractors
that you may employ. It is important to distinguish that Errors and Omissions
Insurance is concerned solely with performance failures and negligence in
respects to your products and services-- and not with the performance and
duties of your management. As such, it is a good idea to carry both Directors
and Officers Liability Insurance and Errors and Omissions Liability Insurance.
Employment Practices Liability Insurance (EPLI)
Employment Practices Liability Insurance provides coverage for a wide
spectrum of employment-related claims such as discrimination- age, sex,
race, or disability- wrongful termination of employment, sexual harassment,
and many other employment-related allegations. It provides protection for
claims made by employees, former employees, and/or potential employees.
It can additionally include coverage for a companies Directors and Officers. In
fact, the majority of of a companies investors and directors will require that
you carry this insurance as part of your Directors and Officers Liability policy
since they can be held liable in suits relating to employment practices.
EPLI coverage often includes the settlement costs and legal fees are both in
the policy limits. That is, for every dollar spent defending a claim, less money
will be available to settle the claim.
EPLI policies generally have the following exclusions:
Occupational Safety and Health Act (OSHA) Violations
Fair Labor Standards Act Violations
State Employment Law Violations
Consolidated Omnibus Budget Reconciliation Act (COBRA) Violations
Employee Retirement Income Security Act (ERISA) Violations
Certain Americans With Disabilities Act Claims
Intentional Institutional Claims such as retaliating against a whistle blower
Punitive Damages
Employment Practices Liability Insurance provides coverage for a wide
spectrum of employment-related claims such as discrimination- age, sex,
race, or disability- wrongful termination of employment, sexual harassment,
and many other employment-related allegations. It provides protection for
claims made by employees, former employees, and/or potential employees.
It can additionally include coverage for a companies Directors and Officers. In
fact, the majority of of a companies investors and directors will require that
you carry this insurance as part of your Directors and Officers Liability policy
since they can be held liable in suits relating to employment practices.
EPLI coverage often includes the settlement costs and legal fees are both in
the policy limits. That is, for every dollar spent defending a claim, less money
will be available to settle the claim.
EPLI policies generally have the following exclusions:
Occupational Safety and Health Act (OSHA) Violations
Fair Labor Standards Act Violations
State Employment Law Violations
Consolidated Omnibus Budget Reconciliation Act (COBRA) Violations
Employee Retirement Income Security Act (ERISA) Violations
Certain Americans With Disabilities Act Claims
Intentional Institutional Claims such as retaliating against a whistle blower
Punitive Damages
Directors and Officers Liability Insurance
Directors and Officers Liability Insurance provides financial protection for the
directors and officers of your company in the event they are sued in
conjunction with their duties as they relate to the company. Directors and
Officers Liability insurance should be purchased once you assemble a board
of directors. Moreover, investors-- especially Venture Capitalists-- will usually
require that you show evidence of Directors & Officers Liability insurance as
part of the conditions of funding your company.
This type of coverage protects your board of directors from claims arising
from stockholders, employees, and clients. Since a director can be held
personally responsible for acts of the company or nonprofit entity, most
directors and officers will demand that you carry this coverage since they will
not want to put their personal assets at stake.
Claims against directors and officers have been increasing over time.
According to some recent surveys, in fact, about 30% of all companies can
expect to have at least one claim made against its directors or officers. The
frequency of claims against directors and officers will correspond to a number
of factors which include, but are not limited to-- the size of the company, the
type of business, whether the company is publicly or privately owned, and the
number of shareholders. Companies with greater assets are more likely to
have claims made against their directors and officers then companies with
fewer assets, and public companies, in general, have twice as many claims as
private ones.
Directors and Officers Liability Insurance provides financial protection for the
directors and officers of your company in the event they are sued in
conjunction with their duties as they relate to the company. Directors and
Officers Liability insurance should be purchased once you assemble a board
of directors. Moreover, investors-- especially Venture Capitalists-- will usually
require that you show evidence of Directors & Officers Liability insurance as
part of the conditions of funding your company.
This type of coverage protects your board of directors from claims arising
from stockholders, employees, and clients. Since a director can be held
personally responsible for acts of the company or nonprofit entity, most
directors and officers will demand that you carry this coverage since they will
not want to put their personal assets at stake.
Claims against directors and officers have been increasing over time.
According to some recent surveys, in fact, about 30% of all companies can
expect to have at least one claim made against its directors or officers. The
frequency of claims against directors and officers will correspond to a number
of factors which include, but are not limited to-- the size of the company, the
type of business, whether the company is publicly or privately owned, and the
number of shareholders. Companies with greater assets are more likely to
have claims made against their directors and officers then companies with
fewer assets, and public companies, in general, have twice as many claims as
private ones.