What Is Title Insurance And Why Do I Need It Anyway?

If you are interested in joining the ranks of successful women in real estate, it is important that you come to a complete understanding of the fundamental elements associated with real estate investing. Yes, few people find the intricacies of title insurance exciting and many feel it's down right boring. However, if professional women have…

If you are interested in joining the ranks of successful women in real estate, it is important that you come to a complete understanding of the fundamental elements associated with real estate investing. Yes, few people find the intricacies of title insurance exciting and many feel it's down right boring. However, if professional women have learned anything over the course of the past few decades, it is that knowledge is power. In this regard, one of the most important elements of the real estate investment process is to understand how title insurance works.

So, read on and learn.

Title insurance is exactly as it sounds. It insures you in case that at some later date, a recorded or unrecorded document surfaces that can affect the title of the property you purchased. Putting it simply, a title insurance policy insures the ownership of the property, and protects you as the owner.

Before providing a title insurance policy, the title company examines, summarizes and classifies every document affecting the property and its previous owners. Highly skilled title searches assemble this material and forward the results to a title officer. The title officer or examiner then writes an opinion on the title. The opinion will initially take the form of a preliminary title report and absolutely become a policy of title insurance.

Although title insurance is designed to protect a purchaser of real estate against title defects that are discovered after that individual takes title to a piece of property, the real work of a title insurance company is actually undertaken in advance of the closing on the sale itself. After a real estate sales contract is executed between a seller and purchaser, a preliminary title search is performed and then a policy of title insurance is obtained.

This means that the title insurance officer physically evaluates the deed to the property, and then reviews all of the liens and encumbrances that have been filed against that deed over time. This effort by the title insurance company is designed to ascertain that any liens or other encumbrances that may have been placed against the property in the past have been released.

Any liens or encumbrances remaining on the deed or title to the real estate subject to sale will prevent the buyer to obtain “clear” title because every questionable item recorded on title is classified as a defect or “cloud” on title. One of the essential clauses in real estate sales contracts requires the buyer to deliver “clear” title of the property to the purchaser by a certain date. Therefore, the title insurance company will take all necessary steps to clear up any “clouds” on title within the time frame mandated by the contract for the sale of the property.

As mentioned, if for some reason there is a defect on title – a lien or encumbrance not discovered before the new deed is recorded – the title insurance company is liable for any loss sustained by the real estate purchaser because of that title defect. In most instances, the loss sustained amounts to legal fees and court costs associated with taking action to clear the defect.

If the purchaser or real estate investor does not have adequate title insurance, she is the one who sustains the loss. This is why it is vital to forgo standard title insurance and invest in extended coverage policies with every one of your transactions.

Top SEVEN ways your property can be put at risk:

Your property can be put at risk in a variety of ways. If your property does not have clear title, any questionable recorded or unrecorded documents may have been executed many years before, yet surfaced much later. In this case, know that you are protected by title insurance. Below are seven common items that can put your property risk.

1. Forged deeds, mortgages, satisfactions or releases

2. Deed by person who is insane or mentally incompetent

3. Deed by a minor

4. Deed from a corporation, unauthorized under corporate bylaw

5. Deed by partnership, unauthorized under partnership agreement

6. Deed given under fraud or duress

7. Deed executed under falsified power of attorney

Top SEVEN things to look for:

If any of the following items appear on the preliminary title report, you must take immediate action. The first step is to contact your title company. Failure to investigate any of the following may cause a significant delay in closing of escrow and / or decrease your profit.

1. Tax Liens

2. Liens Mechanics

3. Notice of Action / Judgments (including back child support)

4. Bankruptcies

5. Uninsured Deeds

6. Legal Access to and from the subject property

7. Typos in the legal description and / or parties' names

Two Separate Policies

Nearly every sale of a residential property involves the purchase of two separate policies of title insurance. One policy names the buyer as the interested party and the second names the lender as the insured party. It is customary for the seller to provide and pay for a title insurance policy on behalf of the buyer. This is done so that the buyer can be assured that the property does indeed belong to the seller and that there are no unexpected liens or encumbrances against it. If the buyer borrows money to purchase the house, it is normally a requirement of the loan that the buyer purchase title insurance on the lender's behalf for the amount of the loan and sometimes for the amount of the entire sales price.

One-time Investment

The purchase of a tile insurance policy is single purchase transaction. You pay one premium, and the policy holds in force until you sell or refinance your property. There are no recurring fees. Premiums for the title insurance policy are usually based on the amount of risk claimed by the insurer. The liability is based on the sales price of the property, or, in the event of a lenders policy, on the amount of the loan.

In conclusion

It would be to your benefit as a woman investing in real estate, to have a working relationship with a helpful and motivated title representative which sole purpose is to sell title policies on behalf of his or her employing title insurance company. Find out what he or she is willing to do in order to earn your business.

– Will the company allow you access to their public record database?

– Can you request and receive copies of recorded documents?

– Will the company create property profiles for your hot deals?

– Can the company set up a farm (territory) to help you generate leads?

Ask ahead of time. A good working relationship with a title insurance company enables you to conduct business efficiently. In simple terms, everyone investing in real estate must know the specifics and the complexities of title insurance and the benefits of building a solid relationship with a good title representative.

Cheap Home Contents Insurance

Why is it people neglect to acquire home contents insurance and do not give it a second thought until disaster strikes. Since most of us have something of value in our home that we'd be hard pressed to replace it is a excellent idea to insure it. With this affordable insurance you purchase a guarantee…

Why is it people neglect to acquire home contents insurance and do not give it a second thought until disaster strikes. Since most of us have something of value in our home that we'd be hard pressed to replace it is a excellent idea to insure it. With this affordable insurance you purchase a guarantee that you'll be able to repair or replace your belongings if something happens to your home. Remember, your home is not just a roof to keep you dry. It also holds all the things you build your life out of.

You can find cheap home contents insurance that is designed to reimburse you for the value of your contents of your home in the event you suffer a loss of it. Cheap does not mean that you have to settle for inferior coverage, it means affordable. You've probably invested a fairly large sum of money into something in your house, whether it's art, jewelry, rugs, or a nice entertainment system. Valuable items can fill your house. You should protect them with the right home content insurance policy.

It is separate and distinct from the insurance policy you have taken out on the structure of the house. Which covers the outside, but not what's inside. Be aware that there might be a limit on the value you can claim for some items. There might be a ceiling on the value of a CD collection, piece of jewelry, or other important item. If you can not get insurance for the whole amount, consider paying more on your premiums to get that privilege, or taking out a policy for that single valuable item alone.

There are things you can do to reduce your promotions while still maintaining good coverage of the items in your home. For instance, many companies will offer a discount if you maintain multiple insurance policies with them, such as your home contents insurance, life insurance, and car insurance. If you've had your policy for a long time without a claim, you may qualify for a cheaper quote. You can negotiate for discounts with the insurer, so that you'll get the best deal.

You should have no problem finding this type of insurance to protect your property inside the home. In fact a quick search online should reveal a number of insurers for you to choose from. You can compare rates and features of multiple companies easily this way. Keep in mind your current insurer may offer cheaper contents insurance for your items and you should compare a quote from them with what you find online. Do not wait until you experience a loss of some sort to realize the value of the things you own and how difficult it will be to replace them. Take the time to do some research and you should find good cheap home contents insurance that fits your needs and offers you peace of mind.

Auto Insurance Brokers – Did You Know Your Credit History Can Affect Your Premium?

Auto insurance brokers are better than getting quotes from just one “big name company.” Why? Because many – if not most – auto insurance companies use your credit history when factoring how much they charge you. Their reasoning is that there is a connection between your credit behavior and the amount of claims you are…

Auto insurance brokers are better than getting quotes from just one “big name company.” Why? Because many – if not most – auto insurance companies use your credit history when factoring how much they charge you.

Their reasoning is that there is a connection between your credit behavior and the amount of claims you are likely to file. Although you may disagree, they believe that people with a better credit history will, in all probability, have fewer insurance losses.

Many companies still use the old tried and true method of age, type of car you drive, number of tickets you have received and where you live to gauge their rate. And again, auto insurance brokers take this into account when putting in your information and shopping for the best rates for you, so saving you a lot of calling around.

When my wife and I moved from Southern California (where traffic is terrible and there was an accident on almost every major freeway every single day) to Sun City West, Arizona I expected to pay a lot less for car insurance (since it is a retirement community). I got the surprise of my life when my rate went up $ 250 per year. I was told this was because there were too many elderly people driving here who should not be driving. I did not like being called elderly at all. I was only 65. But since living here for a while I can see their point. Many of the people over 70 drive too slow and their reactions are much slower, so causing a lot of the accidents on the streets here.
You may think it is not fair for your auto insurance company to be able to look at your credit report but the government says they can do just that. The Federal Fair Credit Reporting Act allows them to do it. It says they may use “Reasonable procedures” and credit history has been ruled as one of them – this also covers consumer credit, insurance, and employment as long as it is fair and equitable.

If you have bad credit then applying for an online quote from one of the big insurance companies you will not be accurate. My daughter used to sell cars and many of her customers with bad credit were quoted one online and another while they actually went to establish the insurance, because that's when the credit got rolled and everything was adjusted. If you look at their sites you will see a disclaimer telling you that this is just a “quote” and that other factors may cause the rate to increase. This is why using an auto insurance broker is better. They will put all the information into the system “up front” and the quotes you get from them will not change.

Another thing insurance companies look at is your insurance credit score – never heard of it? Well it's there. The insurance credit score was developed by the insurance companies by using the same methods as the credit bureaus to predict your risk factors.

    · Foreclosures, liens, collections etc. · Your late payment history · How long your credit history is

This is not all but enough highlights to give you the picture. Each insurance company uses different techniques. Because of this it is difficult to know what a good credit score is.
Auto insurance brokers are not legally obliged to tell you your insurance credit score. If you have not checked your credit report in awhile we suggest you order a copy today and know what's on it before you start insurance shopping.

You can legally challenge any old, outdated, or incorrect information. This can be a daunting task and takes time, persistence and the tenacity of a bulldog. We suggest you contact Lexington Law. They specialize in credit repair. You pay monthly, so once they've done everything you need them to you can cancel their services. They even give you a money back guarantee if you are not satisfied.

It's a good idea to shop for insurance with auto insurance brokers who represent many companies rather than just one big one. Auto insurance brokers will look at your needs and match you with the lowest rates possible. If you just call any large company you very likely will not get the very best rate possible. Insurance, like any other commodity, is subject to competition. All are licensed so you will not get ripped off.

If you have bad credit it's better to use a smaller, lesser known insurance company, as they will typically give you the best rates. Most of these companies work only through auto insurance brokers, and do not advertise on TV and the web. Which is why they can offer you lower rates than the big companies. Give one of our auto insurance brokers a call today and let them compete for your business!

Reference: http://www.ftc.gov/os/statutes/fcra.htm

Insurance For Mobility Products

It is available to take a warranty (extended) and incidental damage insurance to cover home mobility products which include adjustable beds, riser recliner chairs and stair lifts. Therefore in the event of an incidental damage including mechanical or electrical breakdown, protection will be offered. Such warranties and insurance can be taken out on both new…

It is available to take a warranty (extended) and incidental damage insurance to cover home mobility products which include adjustable beds, riser recliner chairs and stair lifts. Therefore in the event of an incidental damage including mechanical or electrical breakdown, protection will be offered. Such warranties and insurance can be taken out on both new and used products. However before taking out a warranty it is worth considering that a new product may be covered by the manufacturer's warranty.

Periods usually cover 12, 24, 36 or 48 months for new products. For used products cover can usually be taken three months after the product have been purchased and will last for 9 months. This is usually to ensure that used products are reliable before insurance and warranties stay. Upon renewal a 12 month period can be taken.

There are two main types of warranties available these are:

On Site (OS) Warranty

This warranty is the most convenience where repairs to the mobility product are transported out at you home. There may be exceptional cases were the product can not be repaired at the home and will need to be taken away for full repairs.

Return to Base (RTB) Warranty

This warranty will result in the product being taken to a workshop for repairs. For new product be wary of this warranty as often you may be requested to return the product in it original packaging which may not always be possible.

Before taking any insurance or warranty cover be sure to read all small print, and ask any questions you may have, especially with reference to the type of warranty being offered. It is also possible to take insurance to cover mobility scooters. There are two aspects of this type of insurance. First, to cover the scooter itself for damage, secondly to cover injuries or damage to a third party or the third parties property.

UK Loan Protection Insurance Can be Found Cheaply

UK loan protection can be found cheaply but you have to go with a specialist in payment protection insurance (PPI) if you want the cheapest premiums along with the advice needed to ensure that a policy is suitable for your needs. Payment protection or ASU insurance as the product is also sold under is taken…

UK loan protection can be found cheaply but you have to go with a specialist in payment protection insurance (PPI) if you want the cheapest premiums along with the advice needed to ensure that a policy is suitable for your needs. Payment protection or ASU insurance as the product is also sold under is taken out if you want to ensure that you would have the money each month to continue meeting your loan repayments and not get into debt should you become unable to work due to redundancy, long term sickness or accident.

However UK loan protection has not been without its faults which stem from an investigation in 2005 when the Office of Fair Trading received a super complaint from the Citizens Advice. The Financial Services Authority fined several high street names for wide spread mis-selling of the product due to sloppy sales practices and a lack of information given to many consumers at the point of sale.

Currently the whole protection insurance sector is in the hands of the Competition Commission who are conducting a review which is set to reach conclusion in February 2009. The mis-selling also ranged from not making the consumer aware of the exclusions which are in all policies, such as if you are self-employed, retired or only in part time working to charging way over the odds for the cover.

When bought correctly from a standard specialist, UK loan protection insurance can give you a tax free income each and every month you are out of work for up to 12 months and with some policies, for up to 24 months. The cover would begin to provide you with a tax free income once you have been out of work for a set period of time which can be between one to three months' of being out of work and can give great peace of mind and security until you get back on your feet.

While UK loan protection insurance can be taken out along the loan and indeed is actually offered at the time of taking out borrowing, historically this is the dearest option for taking what can be indemnifiable protection. The premiums for loan protection can be very expensive when taken with the loan and it can almost double the cost of the loan. If you want the cover then it is essential that you decline it from a high street lender and shop around for it independently. High street lenders rely on high promotions to make up for offering cheap loans however the specialist standalone provider on the other hand puts the consumers best interest ahead of huge profits and can save you hundreds of pounds while providing quality UK loan insurance that is a far superior product.

If you want the protection and security that UK loan protection insurance can give then stick with the standard specialist provider to make sure you do not fall prey to mis-selling of the cover. Mis-selling of payment protection has been wide spread and the majority of problems stemmed from a lack of information being given at the time of selling the product. All specialists will have the consumer's best interest at heart and make the cover available for the cheapest premiums while giving you excellent free honest advice.

Information on Insurance For Mobility Scooters

Current legislations state that there is no requirement for a user of a mobility scooter to hold adequate insurance, unlike car users who are legally required to hold adequate insurance. However, users should give careful consideration to taking out at least third party insurance to cover any potential claims that could have made the user…

Current legislations state that there is no requirement for a user of a mobility scooter to hold adequate insurance, unlike car users who are legally required to hold adequate insurance. However, users should give careful consideration to taking out at least third party insurance to cover any potential claims that could have made the user cause injury or damage to persons or property. As these claims can often run to ten of thousands of pounds if not more, plus any legal costs which are incurred. Consideration should also be given to taking our adequate insurance to cover the scooter itself. A new scooter can cost hundreds of pounds and insuring it against damage, theft etc. could be a financial sound decision.

The DVLA make the following comments with reference to the insurance:

“Although it is not a legal requirement, it is strictly advised to have insurance. Sufficient schemes are not too expensive and are available to cover your personal safety, other people's safety and the value of the vehicle.”

As discussed previously the insurance can be divided into two areas; The Scooter itself and Third parties (people and property).

Insuring the Scooter

The cover for the scooter usually protects you against the cost of repairs to, or replacement of the mobility product in the event of an accident. Some policies also cover or will pay towards the recovery costs of getting you and your mobility product home following an accident or breakout. Users should check to see the level of cover being offered on the policy.

Third Party Insurance

If you accidently hit anyone or anyone's property and you are sued for negligence the insurance should pay for your defense and the resultant damages if you are found to be negligent. Such claims can be very expensive and insurance to cover legal costs and law suites would be very worth while. Such situation could include hitting a pedestrian, crashing onto a car, or causing an accident through negligent driving.

Conclusion

It is worth while holding adequate insurance to cover your scooter and any potential third party claims against you should any accidents occur. Shop around to ensure you receive a good quote which offers adequate cover.

Family Insurance – Protecting Your Greatest Asset

With so many different types of insurance now available, it can be difficult for some family's to know which coverage they must have, versus which ones they should have. Here are a few tips on choosing the right insurances for you and your family: -Think about your needs. -Consider your budget. -Think about future changes…

With so many different types of insurance now available, it can be difficult for some family's to know which coverage they must have, versus which ones they should have.

Here are a few tips on choosing the right insurances for you and your family:

-Think about your needs.

-Consider your budget.

-Think about future changes to your family.

-Consider what would happen to your family if you did not have a certain type of insurance.

Once you've considered what your family's needs are, it'll be easier to decide which types of insurance are necessary. Here are a few of the most common insurance policies today's average consumer should consider:

Health Insurance:

No one can dispute the need for good quality health insurance these days, especially if you have children. The most common types of health insurance these days include:

HMO Plans – the most restrictive type of health coverage, HMO's are also the cheapest for both the employer and the employee. These plans require participants to see only approved doctors. Specialists may be seen with a referral from your Primary Care Giver. Co-pays are relatively low, with virtually no deductibles on basic services.

PPO Plans – is a combination plan, which works like an HMO, but allows patients to see any doctors they choose whether they participate in the plan or not, at an increased fee. Many people like the flexibility and options with this type of plan, although promotions are usually much higher and deductibles can reach 20% when seeing an out-of-network provider.

Indemnity Plans – work very much like old-fashioned insurance policies. A patient sees any doctor they choose without a referral or pre-approval, but is liable for 20% of the fee. Clearly the most versatile type of policy, it is also the most expensive, both in the case of premiums and deductibles.

Automobile Insurance:

If you own a car, you are legally bound to cover every driver in your household with collision and liability insurance.

Disability Insurance:

How would your family pay the bills if you were taken ill or injured and were unable to work for an extended period of time? Many employers offer short and / or long term disability insurance policies, but many do not. In the event that you are left unable to work due to medical circumstances, short term disability coverage will pay you anywhere from 60-100% of your current salary (depending on the policy), beginning 30-60 days after your injury, for a period of 3-6 months.

Long-term disability insurance is just that – insurance for longer illnesses and injuries. Once your short-term disability coverage expires, long-term disability benefits will enact until you return to work. This is not the same as government disability benefits that some people with permanent disabilities may qualify for. Be sure t check with your employer to see if they offer these types of benefits. If not, you may want to consider purchasing your own policy, especially if you are a sole breadwinner or work at a high-risk job.

Dental / Eye Coverage:

While dental and eye coverage used to be a normal benefit for most fulltime employees, this is no longer the case, leaving some employees solely responsible for taking care of their family's dental and eye costs. These types of policies usually cap at a certain amount and only offer coverage on certain procedures. Still, they can be beneficial to those without enough income to handle these unexpected costs.

Homeowner's / Renter's Insurance:

If you own your own home, your mortgage company required you to carry enough insurance to cover the cost of the mortgage should your house be destroyed in a fire. But, what id you rent? Your landlord has coverage on the building, but you are responsible for covering your marriages. Fairly inexpensive, renter's insurance covers the cost to replace your furniture, clothes, appliances, personal items and displacement costs in the event of an apartment fire.

Life Insurance:

It's not always easy to consider your own mortality, or that of your spouse or children. But, accidents and illnesses do happen and people die. Life insurance for adults is meant to help your family continue to pay the bills in the event of your death and the loss of your income. Insurance for children is meant mainly to cover funeral costs and is a good idea for lower income families who would be financially burdened by these costs in the event of a tragedy.

As you can see, there are many different types of insurance to consider. Check with your agent to see which policies are right for you.

Insuring Your Jewelry – Is It Worth It?

Insuring your jewelry with a policy of its own is very much worth considering that the coverage is quite broad and the promotions low. Even though homeowners insurance is supposedly to have a jewelry insurance component built in, it is often found that covered jewelry is valued very low. When a claim does need to…

Insuring your jewelry with a policy of its own is very much worth considering that the coverage is quite broad and the promotions low. Even though homeowners insurance is supposedly to have a jewelry insurance component built in, it is often found that covered jewelry is valued very low. When a claim does need to be made, a separate insurance policy yields better coverage.

Why insuring your jewelry with a separate policy is beneficial

A separate jewelry insurance policy will list out each of the items and describe them minutely, indicating the value of each individual piece. If you happen to lose any item or end up with damage due to repair, insuring your jewelry will enable you to have it replaced or repaired with the help of the descriptive list.

The Procedure Involved For Insuring Your Jewelry

Usually state laws govern the insurance industry and even mandate the type of language to be used in the contracts. In some states there is more flexibility where insurance companies can word their own policies. It is always better get in touch with an agent in your area to know the right procedure.

Depending on the insurance company, there will be a minimum annual premium applicable. It is usually advisable to have your jewelry evaluated by a professional to avoid errors in judgment both at the time of going in for a new policy as well as a renewal. You will need to find out from your insurance agent what the procedure for a claim is. In case you lose your jewelry, you would want to know whether the appraised value is paid to you or whether there will be discounts. It is better to make a note of what you can approach for your claim. While insuring your jewelry, clarify special clauses and find out what happens if you lose one item from a set of two and whether the insurance policy will cover the entire set, if specified in the policy.

As far as promotions are concerned this can vary depending on where you live.
Most companies will charge based on the value of the jewelry, in the sense that the more expensive, the higher the premium. It is possible to negotiate the best deal by going in for insuring your jewelry with the same insurance company where your home or car is insured.

How claims are settled

There is one thing you bought to know about insurance companies. The money paid to the claimant will always be the amount it would cost them to replace the item, and not the insured value. If a specific piece of jewelry was appraised at a particular amount, the compensation will only be the cost of the replacement, which could be less than the insured value. If your jewelry is damaged, the insurance company will offer to repair it. If you lose it, they will make a replacement with a similar quality item. The options for settlement will also differ from company to company depending on what is specified in the policy.

Do not just take it for granted that you will simply be paid the appraised value should you make a claim. The appraised value is only the maximum amount that the insurance company is liable for, and not necessarily what you will receive. Depreciation also comes into the picture over time and the actual cash value that the insurance companies talk about will reflect the cost of replacement after the depreciation is deducted. The actual cash value depends on the prevailing rates of gold, silver and diamonds and your claim settlement could be very different from what you foretell.

Remember to retain all your original bills and photos of your jewelry at the time of insuring your jewelry, along with the appraisal made by your jeweler since this will be required to calculate your premium.

Professional Indemnity Insurance for Various Professions

A solicitor seeking protection under professional indemnity insurance is not something which most of us thinks about being necessary until last years. As the very name suggests, a solicitor is adept with his profession, with various laws and legislations that pertains to his area of ​​expertise. In fact, the very status of a solicitor itself…

A solicitor seeking protection under professional indemnity insurance is not something which most of us thinks about being necessary until last years. As the very name suggests, a solicitor is adept with his profession, with various laws and legislations that pertains to his area of ​​expertise. In fact, the very status of a solicitor itself is a sure sign of authenticity and height of meticulousness, and he being charged for failure to deliver up to his standards is something which we never believed could be a possibility.

The situation is quite different nowdays. The overall industry scenario has become much volatile, making the jobs of solicitors tougher. A minute and unaccounted step has a good probability to lead to nasty claim against a solicitor, amounting to severe financial loss, loss of reputation, or both, and these are not uncommon. Here, professional indemnity insurance is a necessity for solicitors even.

Professional indemnity insurance policies for solicitors are bit different from typical professional indemnity covers available for other professionals. Professional indemnity covers for designers are widely drawn. It should be noted that the type of service offered by manufacturers are different in nature from other professionals and so are the types of claims that arise against solicitors. A typical policy covers civil liability arising in the course of work carried out in the course of private legal practice; however, there is some exclusion. Professional indemnity insurance for solicitors does not usually cover claims for negligence or breach of contract, but for breach of trust, breach of fiduciary duty, perceived dishonesty, etc. These are the areas where professional indemnity insurance policy that is applicable to other professionals differs from a professional indemnity cover for solicitors.

In most instances, a policy breach may result in claims going unpaid. In such situations, other professionals have policies that contain provisions limiting the rights of the insurer in cases of policy non-compliance; however, professional indemnity insurance policies for solicitors are in comparison more generous in nature of the cover provided.

It is very important that attorneys take note that while the cover may be widely drawn, it may not include any activity that typically does not come under the areas covered by a solicitor under normal circumstances. If any solicitor engages in any activity that falls outside the periphery of solicitation, it should be immaculate put across the insurance agency, who, in turn, will make sure that the offered policy covers the applicant from any claim.

What is E&O Insurance? Do You Need it, and What Does it Cover?

You get insurance in order to protect yourself from disaster. When you think of disaster and insurance, you think of bad weather, stolen goods, or a number of other unforeseen physical mishaps that can ruin your business if you're not covered. The same thinking is often applied to business, where owners have equipment to be…

You get insurance in order to protect yourself from disaster. When you think of disaster and insurance, you think of bad weather, stolen goods, or a number of other unforeseen physical mishaps that can ruin your business if you're not covered. The same thinking is often applied to business, where owners have equipment to be safeguarded, payroll to be managed, and all other types of business assets and concerns that need to be covered, too.

In other words, when people think of insurance for themselves or their business, they think of the physical things that can go wrong with that business, and getting coverage to cover those range of possibilities. It's pretty straight forward, common sense, and even forward-thinking to a degree.

The problem is that, with today's business environment, it's just not forward-thinking enough. For business professionals in particular, it's probably only half the equation when it comes to getting yourself and your business properly insured.

E & O Insurance

Errors and Omissions insurance. Ever heard of it? If you're a professional, you better hear of it. Not having it could cost you dearly.

E & O insurance, as it's called, essentially protects the business professional from lawsuits arising from real or perceived misconduct resulting from the normal conduct of business. It goes beyond the kind of insurance most people are used to because it covers aspects of a business that impact others when interacting with the public.

This is also known as professional liability insurance, and the reason liability is due to be of such concern to the business owner is related to the very nature of conducting business in and of itself.

Unlike private individuals and their families, businesses are specifically set up to interact with the public as a matter of routine. You normally do not provide a good or a service to a small circle of friends. You set up a business in order to meet a demand that exists out there in the public. That involves interacting with the public and performing exchanges with them in ways that may be even hard for you to perceive. The extent to which a business or a professional can have an impact on the public can almost be unimaginable. This is why things like e & o insurance are necessary.

Say you're a lawyer. You provide legal counsel to a client. That client then turns around and uses that counsel as a basis to form a contract with a third party. That third party and its contract provide services to the public. Someone from that public believes themselves to be hurt or damaged as a result of that service. Well, it's possible that the claim can be traced all the way back to the original counsel provided to the client. It may seem improbable. But just think how many frivolous lawsuits are in existence. Errors real and perceivable can end up costing you.

This is a component of liability insurance that many business owner and professionals might not come to fully appreciate until it's too late. This includes e & o insurance. The last thing you want to happen in this regard is to have errors and omissions appraisers come to your door and tell you you're not covered for a particular mistake that comes back to haunt you. Quite literally, the cost could not only be your business, but your reputation as a professional as well.

It's not only errors or mistakes that professionals conduct in the normal practice of business. A plumber might install a wrong kind of pipe. A doctor may prescribe the wrong type of medication – which gets malpractice liability included for the professional as well. An IT professional may install the wrong type of software for a computer system. This stuff happens, and errors and omissions appraisers will usually deal with these kinds of issues as a matter of routine.

Where some of the unforeseen difficulties lie with the conduct of a professional is the possibility of errors or omissions that are simply perceived as such by individuals affected by what you do. In other words, it's not only the real mistakes that you make as a professional that can come back to bite you, it's the mistakes people think you make that can cost you dearly, too – especially if you do not have e & o insurance.

You might ask, well how does that work? Think about it. If someone just thinks your professional conduct cost them harm or injury, you'll need to hire lawyers yourself, which can mean considering legal fees in and of themselves. There's also the possibility that you'll lose a case because a jury does not like you, even though you did not technically do anything wrong. Just being in the right, or thinking you're being in the right is not enough. You need a jury to think so, too, and that can sometimes be like rolling the dice at an all-night casino game.

There is also the possibility that, even though damages were the result of an error incorrectly perceived as such by another party, that they're deemed as damages nonetheless. In other words, damages from perceived errors are still damages, and someone may be seen as having been responsible. That someone might be you. Unless you have e & o insurance that covers such possibilities, the last people who will want to be your friends in a crisis are those pesky errors and omissions appraisers. They will not need care about what's right, they'll care about what they have to cover.