NOWRA now endorses errors and omissions insurance as protection against the consequences of mistakes. “Nobody’s perfect,” observes executive director Eric Casey. “Even a business with the best employees and solid business practices can make mistakes. In addition, chances are installers will work with subcontractors. No matter how carefully they are selected, the installer has limited control over contractors' ability to avoid mistakes.”
For all these reasons, says Casey, business owners in the onsite industry who provide professional design or inspection services should carry errors and omissions (E&O) insurance. Even one lawsuit from a client can damage a firm’s reputation and cause financial strain.
A solid E&O policy can give its owner the security needed to come out on the positive side of a bad situation. It covers a company in case a client holds it responsible for a service provided that did not have the expected or promised results. It is similar in many ways to malpractice insurance for doctors. Most E&O policies cover judgments, settlements and legal defense costs, and typically cover both salaried and hourly employees, as well as subcontractors.
Mistakes made while providing engineering, design or inspection-related services are considered professional liability risks and are not covered by commercial general liability policies. Even if the owner is not at fault, litigation is time-consuming and expensive. In addition, more potential clients – especially larger organizations – are requiring E&O coverage in their RFPs.
NOWRA has recently endorsed E&O coverage offered through Alteris. Included as part of the company’s SeptiCover insurance program, this policy is specifically designed for the risks faced by onsite system designers and inspectors. It is a stand-alone policy: It does not have to be purchased in conjunction with any other insurance. The annual premium for $250,000 in coverage is $750; for $1 million coverage, the premium is $1,250.
Visit http://www.nowra.org/documents/2011/SeptiCover2Summary.pdf.
