Business insurance is an expense for any company, but for those who look to simply get the minimum coverage, they could be risking financial failure. There are several areas of liability that companies are exposed too, and a comprehensive e insurance plan will be able to address these risks. The group at Transparity Insurance Services advises all business operators to know the difference between E&O vs D&O, and the dangers of just choosing one or the other.
Errors and Omissions
With an E&O policy, the company, it’s employees and other professionals are covered from negligence claims or other professional liability assertions that the individual made an error. The plan generally covers the court costs associated with a claim defense, as well as contributing to any settlements that were awarded by a judgment against the company. Lawyers, financial advisors, consultants, and other advice-giving fields are often prime candidates for an errors and omissions policy.
Directors and Officers
The D&O policy is designed to provide reimbursement to the highest-ranking administrative members of a company for legal defense costs or losses that were incurred when legal action was brought against them for wrongful acts. It may cover an officer or directors failure to follow the by-laws, stalled retirement plans due to a lapse in investment judgment, defamation by another ranking member of the company and improper distribution of company funds or insurance awards.