Step by step
The mass majority of long-term Ontario businesses have and maintain a valid E&O insurance policy. This insurance might seem like an unnecessity, but this couldn’t be further from the truth. Even if the insurance is not required for your specific profession, you never know when a client will become disgruntled. Therefore, you should always maintain E&O insurance. The insurance will protect your company and allow you to remain in business for the long run. Of course, it is important to remember that not all businesses need the same amount of coverage. Below, you will learn how to get E&O insurance for your business.
How It Works
Before jumping in blindly, it is absolutely essential to learn more about this form of insurance. The truth of the matter is that errors and omissions insurance is designed to protect your company. While it may provide a little protection and peace of mind to the client, it primarily provides you with protection from lawsuits stemming from neglect. And of course, the insurance also protects you from unfounded lawsuits. After a lawsuit has been filed against your company, the insurance will enter the picture and pay for the legal costs. If you are required to pay a settlement to the client, the insurance will also help.
Therefore, almost all businesses need E&O insurance Ontario if they are going to be providing service to the public in exchange for a profit or non-profit. However, you need to figure out precisely how much you need. Continue below to learn how to do just that.
Evaluating Your Risks
First and foremost, you should understand that each company will face a certain degree of risk. Your risk will be substantially different from that of another business in your area. Therefore, you may not need the same amount of errors and omissions insurance as other businesses in Ontario. Nonetheless, it is essential to obtain enough coverage to ensure your company is protected to the maximum. If there is a possibility that your company could lose a million in settlement costs, it is essential to make sure your insurance policy will cover that amount.
Determine your precise risks and make sure your insurance coverage is capable of accommodating those risks. If you fail to obtain enough coverage, you may end up being forced to pay out of pocket.
Understand That E&O Isn’t Comprehensive
While E&O insurance can be enormously beneficial, you should realize that it will not protect you from all potential problems. You need to understand that E&O isn’t a comprehensive solution. Instead, it only protects your business from negligence and failing to perform up to standard. Therefore, you should not dump your entire bank account into this type of insurance coverage. It does not protect the company from malicious or dishonest behavior. Also, the insurance will not protect you from claims submitted by your business associates.
Therefore, you need to find a balance and dedicate the right amount to E&O insurance and other types of policies. This will ensure your company is protected from all different types of claims and disputes.
Determining Your Coverage Needs
While you’re at it, you need to determine precisely how much insurance coverage you need. Depending on your line of work, you may be required to obtain a minimum amount in Ontario. There are specific laws that require certain businesses to maintain a specific amount of E&O insurance in this province. Therefore, you should check the local laws first. Then, you will need to consider the potential costs associated with a lawsuit and a settlement.
Make sure that you obtain enough coverage to pay for these costs. Again, if you fail to get enough coverage, you may end up being forced to pay out of pocket for legal fees or to reimburse the client.
Always Read The Fine Print
Before signing on the dotted line, it is pertinent to carefully read the fine print. The mass majority of policies will cover each and every legal cost, but this is not always the case. Some insurance providers will actually exclude the defense cost and this could take a big chunk out of your company’s bank account in the future. Therefore, you need to read the fine print and make sure you’re getting comprehensive coverage. To protect your business to the fullest, you need to protected for settlements, judgments and defense costs.
This will help to decrease the likelihood that you’ll be forced to pay out of pocket for anything, regardless of the outcome of the trial.
While the above steps might seem like a hassle and potentially time consuming, you should make your way through them very quickly and carefully. Serving clients without E&O insurance is incredibly risky! Each time you make a decision for your client or take on a new client, you are putting yourself in a risky situation. Therefore, you should not delay! Even if the laws in Ontario do not require you to get the insurance, you should do so immediately. It is generally best to get covered before you begin offering your services.