Tom's BlogWhat is E & O Coverage?
Every contractor needs to be aware that the typical N.C. General Liability commercial policy excludes these kinds of business conflicts, which can turn into a financial nightmare costing thousands of dollars if you aren’t careful. The exclusions in a N.C. General Liability insurance policy are:
- Your Work
- Your Product
- Impaired Property
These exclusions are considered to be part of the expense of “doing business” and once you are exposed to a customer dispute, you also run the risk of exposing yourself and reputation to financial disaster without the right type of insurance protection. E & O coverage is designed, as an endorsement to your existing insurance policy, to provide additional protection for you, as a contractor. This coverage is defined as coverage for claims made by third parties for damage to:
- Your Work
- Your Product
- Impaired Property
caused by any “wrongful act” during the contracting job.
So, what was originally excluded can be added back on by having this type of coverage and comes with a much lower cost than having a separate N.C. business insurance policy.
Know What to Do Before it Happens to You
Assume, as a contractor, you accept a job installing a new tile floor, but in the process, incorrect measurements are taken, so when the job is finished, none of the inside doors close due to the height of the subflooring that was put in. As a result, all the subflooring and tile have to be removed and reinstalled, which end up being costly. With E & O coverage in place, you would not have to pay “out of pocket” for any of the incurred costs from this mistake, with the exception of any applicable deductibles. Furthermore, if you have to go to court, this add-on endorsement also provides protection for awarded damages and legal fees that are incurred, subject to the policy limits.
Contact Your N.C. Independent Insurance Agent Today
As a contractor, you know that mistakes can and will happen. Making sure you have the needed insurance coverage to protect you, your business, and reputation is vital to your success. Contact Paramount Insurance today at 866-869-3335 with any questions you may have regarding Errors and Omissions Coverage. Our goal is to ensure protection for you!
