Errors and omissions insurance (E&O insurance) is a type of professional indemnity insurance. It is also known as professional liability or malpractice insurance. This insurance policy provides coverage against legal liabilities to professionals such as chartered accountants, doctors and service sector companies such as Fintech, Banks, e-commerce, etc. in case of any error and omission caused due to negligence while providing their services resulting in any loss or damage to the clients.Read more
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Regardless of the experience you have, there is always a potential for mistakes. This is where error and omission insurance policy steps in. You should purchase this policy if you are:
If your business deals with sensitive client or business data, the risk of data breaches or loss exists. Professional indemnity insurance steps in to cover financial consequences resulting from data mishandling.
Professionals who provide advice or guidance face the risk of errors causing financial harm to clients. Errors and omissions insurance covers claims arising from such situations.
Professionals may encounter claims challenging the quality of their services. E&O insurance safeguards against financial losses resulting from legal actions taken by dissatisfied clients.
Apart from this, Errors and Omissions insurance policy is important for the following reasons:
E&O insurance shields your business when confronted with claims or legal actions. It covers legal fees, settlement costs, and awarded damages, ensuring your financial stability remains intact.
From small startups to large corporations, errors and omissions offers customized coverage that suits your specific business needs. It effectively minimizes risks associated with professional services.
Having errors and omissions insurance brings peace of mind. It safeguards your organization from potential liabilities arising due to professional errors or negligence. This coverage allows you to focus on your work without worrying about legal or financial repercussions.
Here's a brief overview of what's typically covered under an errors and omissions insurance policy:
Disclaimer: The coverage provided under errors and omissions insurance policy varies from one insurer to another. To learn about the coverage in detail, kindly refer to the policy wording of the insurance provider.
Apart from this, Errors and omissions insurance covers a variety of legal claims against the policyholder that include:
E&O policy does not provide cover for the following perils:
Disclaimer: To learn about the exclusion in detail, kindly refer to the policy wording provided by the insurance company.
Here is a list of businesses and individual professionals who can purchase errors and omissions insurance policy:
Follow the steps given below to raise a claim under the errors and omissions insurance policy:
Step 1: Inform the designated claims handler at Policybazaar regarding the occurrence.
Step 2: The claims handler will furnish you with a claim notification template, which you should duly complete and directly submit to them. This template should include the following details:
Step 3: Upon furnishing these particulars to the claims handler, they will transmit them to the insurance company.
Step 4: Following a review of the submitted claim notification template, the insurance company will formally record the claim and allocate a reference number.
Step 5: Upon the issuance of the claim reference number, the insurance company may opt to engage an appraiser to validate the incident or provide a Letter of Reference (LOR) for further advancement of the claim procedure.
Step 6: The insurance company will send out a claims form that requires your completion, signature, and appropriate company seal endorsement. In the case of individual professionals, their personal seal can be affixed. The standard list of essential documents encompasses: Required KYC Documents
Please note: These are fundamental prerequisites. Additional necessities or any LOR will be conveyed by the insurer through Policybazaar. The claims handler will lend assistance in accumulating and submitting supplementary documents.
Step 7: The insurance company may decide to deploy a survey team to validate the incident site at their discretion.
Step 8: In the event of an ongoing legal case related to the incident, it is imperative to communicate relevant case specifics to the insurance company.
Step 9: Upon the conclusion of the court case resulting in a compensation verdict, the insurance company will duly disburse payment in accordance with the stipulations outlined in the policy.
Disclaimer: A specific percentage of the sum insured is determined to establish the extent of coverage for lawyer's fees. For instance, with an insured sum of Rs. 100 and coverage for lawyer's fees up to 25%, you are eligible for coverage of up to Rs. 25.
Moreover, the insurance company may provide their legal representation, although coverage aligns with the specified terms if you choose to retain your own legal counsel.
Policybazaar provides several features such as a comparison between different plans offered by different companies, provides quotes for your desired insurance plan and not just this, you can also calculate the premium amount of your insurance plan using the online premium calculator tool.
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