Errors and Omissions Insurance in Alaska
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What is Errors and Omissions insurance?
An Errors and Omissions insurance policy (also known as Professional Liability insurance) is an essential policy that protects you and your company in case of a lawsuit due to alleged professional wrongdoing.
The U.S. According to the U.S. Small Business Administration (SBA), Office of Advocacy, there were 74,587 small businesses in Alaska as of 2022. They accounted for 99.1% state-wide businesses, but they are steadily increasing.
There are plenty of opportunities to make mistakes, regardless of what industry you work in, what type of products or services you offer. Even if you have a great track record, one mistake can lead to a lawsuit against your company.
Errors & Omissions insurance is essential to small business owners in order to safeguard their future financial security in a highly competitive market. Your business is protected against any claims arising from your negligence (errors) and insufficient services (omissions).
What does Errors and Omissions insurance cover?
Errors and Omissions insurance in Alaska covers expenses up to the limits specified in your contract. You will save:
- Legal costs – Most lawyers charge an hourly rate. Even if the case is resolved quickly, it can be costly to hire good legal counsel. The longer it takes for the matter to be resolved, the more money you will have to spend.
- Court Expenses – Filing documents with court, underwriting charges and other administrative costs.
- Settlements: To save both sides money and avoid expensive, long-drawn-out litigation costs, most claims are settled outside of court. You might need to pay a client a specific amount depending on the advice of your legal counsel.
- Judgments – If your case goes to trial and the judge rules in favor of the plaintiff, then you will need to pay the adjudged amount. Otherwise, there is the possibility of a lien being placed against your business assets.
Who needs Errors and Omissions insurance?
Errors & Omissions insurance is recommended for professionals and businesses whose work involves providing advice, educated recommendations, or designing solutions.
No matter if the claim is valid or not, Errors & Omissions insurance will protect you, your business, and your reputation from costly consequences.
Professions that often require Error and Omissions insurance include, but are not limited:
|Home Care Providers and Businesses||Yoga Instructors|
What is the cost of Errors & Omissions insurance?
Alaska’s average annual cost for Errors and Omissions insurance is approximately $835. However, the cost depends on your business. Like all insurance, the greater the risk element, the more premiums you’ll need to cover it.
These are the factors that will affect the cost of your errors and omissions:
- Your business’s priorities, location, and risk appetite
- The turnover and size of your business
- How much insurance you require
- If any, your previous claims history
- The persons being covered – their qualifications, suitability to the job, and any past claims
Is Errors and Omissions coverage included in General Liability?
A General Liability policy does not include Professional Liability coverage. General Liability covers property damage and bodily injury caused by customers, vendors, or others. Professional Liability covers errors, missed deadlines, or other events that could arise from your services.
Continue reading: Errors and Omissions vs. General Liability insurance
Learn more about E&O insurance in the states where you work.
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