Small Business Owners: Know the Risks and Benefits of Negligent Acts & Omissions Insurance
Negligent acts & omissions insurance is a type of coverage designed to protect companies from claims related to either gross negligence or a failure to properly carry out duties. It also covers legal costs and settlements if companies are found liable for such errors. This type of insurance can provide much-needed protection for businesses, especially those that operate in more specialized industries where there is an increased risk of professional liability.
For small business owners, understanding and weighing the risks associated with negligent acts & omissions insurance is essential. The cost and coverage of the policy should be considered in relation to the potential financial losses that could result from any lawsuits or other claims against the company due to such errors. It’s also important to review any limitations, exclusions, deductibles, and caps included in the policy before making a decision.
Another key factor to think about is who should be protected by negligent acts & omissions insurance. Generally speaking, it usually covers all partners, officers, directors, and volunteers working at a company as well as any employees who perform professional services for remuneration on behalf of the company. It’s important to remember that certain individuals or entities may still have some residual liability even if they are covered by this type of policy – so these should be taken into account too when making an informed decision about coverage options.
Finally, it’s important for small business owners to understand that negligent acts & omissions insurance can be relatively expensive – often representing 10-20% of an entire commercial insurance package– so careful consideration needs to be given before any decisions are made regarding whether or not it’s right for them. It’s best practice to contact multiple agents when looking into purchasing this type of policy in order to get competitive quotes and identify which offers the best value based upon their particular needs.
When it comes down to it, there is no one-size-fits-all approach when it comes to selecting negligent acts & omissions insurance policies – each small business owner must carefully weigh their own individual circumstances before making a final decision regarding whether or not this type of coverage makes sense for them.