☰ ˟
Agent Appointment  Call Now / 713-227-7283
Logo
  • Home
  • Get a Quote
  • What We Offer
    • Automobile
    • Bonds
    • Business & Commercial
    • Business Owners Policy (BOP)
    • Commercial Auto
    • Dental
    • Earthquake
    • Farm
    • Flood
    • General Liability
    • Health
    • Homeowners
    • Life
    • Limousine
    • Motorcycle
    • Recreational Vehicle
    • Renters
    • Trucking
    • Vision
    • Watercraft & Boat
    • Windstorm
    • Workers Compensation
  • Agents
    • Agent Appointment
    • How We Can Help
    • Carrier Appointments
    • Online Payment
    • Get a Quote
  • Policy Service
    • Customer Service Forms
    • Make a Payment
    • Claims
  • Resources
    • View our Blog
    • Secure File Area
    • Refer a Friend
    • Important Links
    • Calculators
    • Free Reports
    • Insurance Glossary
    • FAQs
    • Join Our Newsletter
  • About Us
    • About Reliable Insurance Managers Inc
    • Our Locations
    • Employment Opportunities
    • Employee Directory
    • Customer Testimonials
    • Privacy Policy
  • Contact

What can we help you cover!
Bookmark and Share
Home > Blog > Why Contractors Might Need Professional Liability Insurance
THURSDAY, AUGUST 22, 2019

Why Contractors Might Need Professional Liability Insurance

If you’re a general or specialized contractor, your work probably involves a lot of manual labor. Therefore, you usually spend a lot of your time assembling projects and committing time to making sure the work goes off without a hitch. However, there are times when you couldimage of general contractor make mistakes throughout the course of your services. If you do, your liability insurance might cover the losses caused to others. However, you might need a very specific type of coverage if your advice or consultations cause harm to other parties. This is professional liability insurance, also called errors & omissions or E&O coverage. Not all contractors need this protection, but here’s why you should consider it.

What’s an E&O Policy

Most contractors need at least a general insurance policy within their business insurance portfolio. This coverage protects contractors in case they cause bodily injuries or property damage to third parties, like clients, in the course of working with them. So, if you are remodeling someone’s bathroom, but wind up causing a fire that damages part of the house, you might have to use this coverage to compensate the other party for the losses they sustained.

However, general liability policies usually only apply to damage caused by your actions. They won’t necessarily apply to cases where inadequate services caused damage to others. That’s where errors & omissions policies can come in handy.

An E&O policy might cover the losses you cause to others through improper advice or inadequate work. Typically, this coverage applies to white-collar professions like lawyers and CPAs (in the medical field, it’s another name for malpractice insurance). So, for example, if a lawyer makes a mistake when advising a client, then you might need this coverage to help you pay for the costs of settlements or lawsuits

Why Contractors Might Need Coverage

As someone who does physical work or manual labor, you might not think you need E&O coverage within your contractors insurance policy. That’s not necessarily true.

Contractors often provide a lot of services besides just building projects. Therefore, if you make mistakes when providing these services, then you might have to compensate a client because of your negligent or faulty work.

Suppose, for example, that you are not only the contractor, but also run a construction consulting business. Perhaps you provide advice to individuals on how to complete a wide variety of projects, besides doing the work itself. If it comes out later that you misrepresented to your client various aspects of the project, they might sue your company for the losses you caused. Therefore, an E&O policy might be able to help you cover the settlement and legal costs that might arise in these cases.

Or, look at another common service that a contractor might provide—inspections. Suppose that you inspect a home, either before someone moves in, or during the course of their residence there. You might miss something, like damaged electrical wiring, which you should have caught. If that electrical problem causes a fire later, the client might allege that your negligence contributed to the cause for the fire. An E&O policy can help you with your response to such allegations.

One key thing to remember about this coverage is that it can apply even if a lawsuit proves totally unfounded. Perhaps, for example, there was no way your inspection process or rules would have led you to discover the fire risk existed. That doesn’t mean a client still can’t sue you. An E&O policy can therefore assist you with the related legal costs, even if you never wind up facing a court settlement.

Also Read: Liability Coverage Options Within BOPS

Posted 3:38 PM

Tags: business insurance, contractors, general liability, e and o insurance
Share |


No Comments


Post a Comment
Required
Required (Not Displayed)
Required


All comments are moderated and stripped of HTML.

NOTICE: This blog and website are made available by the publisher for educational and informational purposes only. It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.
Blog Archive
  • 2020
  • 2019
  • 2018
  • 2017
  • 2015
  • 2014
  • 2013
  • 2012
  • 2011
  • 2010
  • 2009
  • 2008

  • insurance(133)
  • texas(93)
  • houston(45)
  • to(44)
  • tips(39)
  • katy(39)
  • safety(29)
  • in(23)
  • for(20)
  • auto insurance(19)
  • insurancepro(19)
  • on(18)
  • auto(15)
  • from(15)
  • health(15)
  • policy(13)
  • home insurance(13)
  • business insurance(13)
  • of(12)
  • savings(11)
  • a(11)
  • agency(10)
  • coverage(10)
  • how(10)
  • car(10)
  • houston auto insurance(9)
  • complaints(9)
  • quoting(8)
  • obama(8)
  • texas department of insurance(8)
  • new(8)
  • reports(7)
  • up(7)
  • house(7)
  • homeowners(7)
  • website(7)
  • state(6)
  • more(6)
  • life insurance(6)
  • the(6)
  • what(6)
  • healthcare(6)
  • after(6)
  • renters insurance(6)
  • your(6)
  • tx(6)
  • ways(6)
  • senate(5)
  • work(5)
  • houston car insurance(5)

View Mobile Version

Our Customer Feedback

Read More

Our latest blogs

  • Carrier
  • Carrier
  • Carrier
  • Carrier
  • Carrier
Reliable Insurance Managers, Inc.
Call:
713-227-7283
We work for you. As a one-stop agency, we continually search for companies that offer great rates and that are easy to work with. Our staff of proven professionals is committed to providing you with the type of exceptional service you deserve and expect.
We're here for you
Home Page/ About Us/ Contact Us/ Our Blog/ Latest News/ Join Our Newsletter/ Refer A Friend
Quick Help Links
Quote Forms/ Service Forms/ File a Claim/ Make a Payment/ Insurance Glossary/ FAQs
Icon Icon
Icon Icon Icon
Social Icon Social Icon Social Icon Social Icon Social Icon Social Icon
© Copyright. All rights reserved. Powered by Insurance Website Builder