As the owner of a growing business in Florida, you know that safeguarding your business reputation is of paramount importance. You make sure that you handpick the most competent people to make up your team, give them the most comprehensive training possible to ensure they give your clients the best possible service.
However, despite your best efforts, there may be situations where you or your team fail to satisfy a client. This is a potential risk that every business faces, that a customer will be dissatisfied with the service provided. When this unfortunate situation does arise, you stand to lose more than just that one client; you are at risk of facing legal consequences too.
This is just one of the major risks that your business should be protected against. And one way to do it is by taking out the right kind insurance that can effectively, efficiently address the risk here. Florida errors and omission insurance could help to protect your business effectively in such situations.
What is Florida errors and omissions insurance?
Errors and omissions insurance (aka Professional Liability insurance) is designed to protect your business and you against a lawsuit filed by a client who claims that you have been negligent with your duties towards them or that you have committed an error while providing the service they signed up for.
For example, a home care nursing provider may be sued by a client who feels that they did not give the right dosage of medication to the patient. Or they may be sued for turning up late and preventing the client from attending a meeting. An architect may be sued for not giving an accurate estimate of expected costs, or for not acquainting the client with potential risks of asbestos sheeting when building their dream home in Florida’s beach-side.
If your business offers a specialist service or professional advices, you and your business are exposed to a degree of risk when you take up a new project or new client. To ensure that this risk does not translate into a financial burden on your business, you should consider errors and omissions insurance to help provide you a financial safety net. This kind of insurance protects you and your business from liability lawsuits.
What does your Florida errors and omissions insurance cover?
Remember that irrespective of whether you ARE at fault or NOT, if a client thinks you are, they can file a case against you, and you have no choice but to defend yourself. If you choose not to, you run the risk of having to accept a default judgment that can go against you.
A legal claim against your business has a significant financial impact on the firm. Apart from the most evident cost of hiring your lawyer, which can be an expensive affair in itself, if you look for expert attorneys with good experience, consider these costs as well- you may lose out on business opportunities while you are busy fighting the case, and if you lose the case, your business bears the immense brunt of paying out the claim. If the client wins a substantial claim, paying out can cripple your business financially.
Take a look at a few examples of claims that a client could potentially file against a business:
- Client claims that the home nursing care provider from your firm did not give the medications to the patient at the right times.
- Client claims that the interior design project you took up stretched way longer than initially estimated, causing them inconvenience and the financial burden of having to live in a hotel nearby for the duration.
- Client claims that an architect did not provide the whole gamut of services that they promised when they gave them the new design for their home revamp project because they did not include the front yard in the designs.
- Client claims that a web designer failed to include two phone numbers on the company website they designed for them which resulted in a loss of business for them.
With your Florida errors and omissions policy in place, you need not worry about the financial impact of taking on such legal battles because plans cover the following:
- The expenses related to mounting your defense: Whether it is your lawyer fees or the cost of documentation or court fees or any other related legal charges, this insurance covers these costs. Remember that if you hire a good lawyer, their fee can amount to quite a whopping sum that can be absorbed by your insurance.
- The claim itself: Whether your client’s claim is justified, or it is baseless, the Florida E & O plan protects your business and ensures that no financial burden falls upon you arising from it. The settlement itself is covered by the plan.
- Costs during the investigation phase: The policy does not just cover costs incurred by you when the case is being fought in the court but also costs you incur from the investigation stage. If you have to spend money to uncover the facts that can prove your innocence, your insurance will cover those.
What is not covered by your Florida E&O plan?
Keep in mind that if your employee had resorted to fraudulent practices, then your E & O policy will not protect you from costs arising out of legal cases filed on those grounds. There are other situations that will not have your insurance kicking in, such as:
- Deliberate malpractice
- Fraud, cheating, dishonesty
- Acts that are against the law
- Pre-existing claims/circumstances
Who needs errors and omissions insurance?
If you own a business in Florida that provides some kind of professional service that a client can claim to be dissatisfied with, you might need to have a Florida errors and omissions policy in place. As a professional who claims to have expertise in a niche area, you commit to conform to certain standards that prevail in your industry concerning the quality, kind, and quantity of services your client gets. If the client feels that you have not matched up to those norms, they may decide to sue.
E & O insurance covers the following kinds of professional services:
- Individuals who offer services in their professional capacity (for example, an interior designer working on their own, without staff).
- A consultant business wherein a professional (say, the interior designer) has a team working under them, providing the services.
- Corporates that may offer such services/advisory wherein they can be sued by clients for error or negligence.
You will find errors and omission insurance plans being opted for by professionals in various fields, including notaries, architects, nursing care providers, financial advice consultants, real estate agents, business accountants, and publishers.
How much does Florida errors and omissions insurance cost?
Several factors impact the cost of your errors and omission insurance plan. The size of your Florida business and the value of the projects you pick up play a major role, in the sense that you need to take out a large enough protection to cover the actual project costs. The larger the project, the more your insurance cover and the higher your costs. Apart from this, your annual payroll, the experience that you and your staff have, the total staff size- these factors also impact the total cost of your error and omission insurance.
In addition, this kind of insurance may well be more expensive in some fields of work than in others, depending on the frequency of litigation and the risk associated with the industry. Your own credit history and legal history is also taken into account by the insurer when finalizing your premiums.
As a responsible owner of a growing business in Florida, you do your best to provide exemplary service. But there is still a risk of a client being dissatisfied with your services and taking legal recourse as a result. In such situations, the legal claim can impact your business rather dramatically in financial terms. With a comprehensive Florida errors and omissions insurance plan in place, you can safeguard the business against such impacts effectively.