As a veteran owned business professional, there is exposure to the financial loss of a third party. Professionals are expected to have an extensive knowledge or training in a particular area of expertise. They are also expected to perform services for which they are hired according to the standards of their practice. If there is a failure to use the skill expected of them, they can be held responsible in court for any financial harm they cause another person or business. This coverage can be called errors and omissions liability.
Professional liability coverage is designed to protect the veteran business professional (accountants, attorneys, real estate agents, consultants, etc…) against liability incurred as a result of errors and omissions. Most policies will cover the economic or financial loss of third parties. The vast majority of professional liability policies are written with claims-made coverage triggers. In addition, professional liability policies contain what are known as “shrinking limits,” meaning that unlike CGL policies (where defense costs are paid in addition to policy limits), the insurer’s payment of defense costs reduces available policy limits.
For the Veteran professional, it is important to consider that the defense cost is a big chunk of what it cost to settle, and limits should be considered accordingly. An insurance professional, who should have errors and omission coverage, can help you determine the appropriate coverage for your situation.
For any professional, protecting your trade against financial loss should be paramount to growing your business. It is good to have piece of mind in the event of an error made, you will not suffer a devastating loss and hurt your overall business. No one expects for this to happen, but it does, and there should be something there to help in the event.
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