E&O coverage and your home business.
If you are like many other home business owners, then you may not know which types of insurance you need to keep your company safe. For instance, you may not know if you need the coverage offered by errors and omissions (E&O) insurance. To help you make informed decisions about your commercial insurance in Los Angeles, California
, here's what you need to know about E&O coverage and your home business.
What is E&O Insurance?
E&O insurance, also known as professional liability insurance, is coverage that offers financial protection if a business makes professional mistakes that cause harm to their clients or a third-party. For instance, if a contractor makes a mistake while repairing a client's roof that compromises the building, then the client could sue the contractor for damages. If the contractor has E&O insurance, then their policy will cover the cost of repairing the issue as well as any legal fees or settlements they need to pay for.
Many business owners assume that their general liability insurance covers E&O claims. Unfortunately, this simply isn't the case. General liability insurance is designed to cover the costs associated with client or third-party claims of bodily injury or property damage. However, general liability insurance will not offer coverage for the claims that allege financial harm. So, the only way to protect your company against this specific risk is with an E&O insurance policy.
Do Home-Based Businesses Need E&O Coverage?
The size or location of your business does not really determine your need for E&O coverage. Instead, it is your business's purpose that dictates your need. Generally, any business that offers its clients professional advice or services needs E&O protection. This is true even if you run a national-based corporation or an independent company based in your home. Businesses that are focused solely on the sale of products are less likely to need E&O coverage. Instead, these types of businesses typically need product liability insurance.
This is what you need to know about E&O insurance and your home-based business. Do you have additional questions about your commercial insurance in Los Angeles, California
? If so, then contact the experts at Fuller Insurance Agency in Southern California. We are ready to assist you with all your business insurance needs today.