Many executives and freelancers are at risk, but few protect themselves. The data pertaining to E&O insurance claims indicates that the indemnities paid by the insurers related to lawsuits against directors and administrators are exceeding. Previous year, the demand for E&O Insurance already rose up to 36%.
The crisis in the country and the high exposure of the professionals to risk due to decision-making is a matter of concern to most companies of all sizes and different branches. In situations where the decisions taken cause material, bodily or involuntary damages to the third parties, it is necessary to repair these damages in the context of the lawsuits that are often filed not only against the company but also against the executives.
The professionals in charge of making the strategic decisions are consequently responsible for their actions and for the damages caused as a result of their decisions. A lawsuit can consume the entire personal assets of an executive or his company according to the insurance experts. Faced with this reality and as a form of contingency, the insurance market provides and Errors and Omissions insurance, also known as E&O insurance.
Depending on the limit contracted for this insurance, it is the solution that offers the necessary protection to the entrepreneurs, executives and autonomous professionals guaranteeing the judicial defense and the reimbursement of the financial losses, keeping the business sustainable in case of the possible problems.
The increasingly popular E&O insurance aims to protect the assets of the executives and managers, including the directors and managers, when held liable, judicially or administratively, for decisions that caused material, bodily or non-material damages to the 3rd parties. Its great value is to protect the company and its executives from the damages caused by decisions taken in the management and conduct of the company. It is a product that has value for every type of company and executives must demand to have the E&O insurance policy.
Errors and Omissions is an increasingly important component of an effective corporate risk management strategy, as clients are increasingly aware of their rights. The professional failures do occur and the company needs to be prepared financially to repair the loss and take the responsibility for the customers. Exactly for protecting the company as well as the customer, it is the existence of this type of solution which has become a differential in the choice of the service provider of E&O insurance.