errors and omissions in New York

Ways to Mitigate Losses with an E&O Policy

As most management consultants in the Big Apple realize and understand, there is often the potential for lawsuits; from competitors, unsatisfied clients, even employees, both past and present. The fact is that these are the ugly realities of being a management consultant. When things go awry, or mistakes are made, litigation may come when least expected from those we had come to trust the most.

Miscommunications, incomplete transactions, claims of unfair business practices are just a few of the exposures and risks faced daily by consultants, and the risk increases depending on the number of people involved in any given project. For many, there’s no task more daunting than protecting your company from costly lawsuits due to unfortunate mistakes or errors and omissions in New York by members of your own team.

How costly errors come about

Inadequate training, a lack of understanding of the client risk analysis process, even unfamiliarity with agency management systems are all ways a company opens itself up to litigation issues. By advocating an agency mentor system, many of the issues associated with not knowing or understanding protocols associated with the work being done will be handled properly. This can be assigned to an individual or team purposed with bringing employees up to date on any changes in policies and practices associated with their jobs.

In this way, an agency can ensure that everyone has the tools and knowledge that will enable them to avoid making some simple mistakes that could occur from unfortunate communications or lack thereof. Typically, E&O claims involve failures to procure the necessary insurance, adequately explain policy provisions and identify exposures, recommend specific coverage types, and provide timely notice of claims to the carrier. Many consultants list properly notifying customers regarding policy cancellations as another problem area.

According to the Independent Insurance Agents and Brokers of America, the most common E&O problems are the result of recommendations made to clients, policy change errors, policy application errors, policy renewal errors, and risk assessment errors. In addition, errors involving policy interpretation, policy replacement, issuance of binders or certificates of insurance are common occurrences that can be lessened by implementing training and/or mentoring programs designed to educate and inform. Mistakes will still happen, and that’s why coverage for errors and omissions in New York is a vital policy to secure.