How Much Will E&O Insurance Cost My Business?
At this point in time, it should be no surprise that all Ontario businesses need errors and omissions insurance. The marketplace in Ontario is truly unpredictable and there are lots of consumers that may be willing to file a frivolous lawsuit against you company to try and obtain a substantial amount of money. Nonetheless, a lot of companies will be hesitant to do so, due to the costs associated with yet another insurance policy. How much will errors and omissions insurance ontario cost your business? You’ll find out below.
Nothing Set In Stone
The mass majority of business owners like definite answers. Unfortunately, when it comes to E&O insurance, you won’t receive them upfront. There is nothing set in stone and no universal answer. Each specific business will be required to pay something different. In fact, it is very rare to find two companies that pay the exact same amount for errors and omissions insurance. Instead, there are several key factors that will be taken into consideration, when the Canadian insurance company determines your premium.
Some of these will be examined in greater depth below.
The Size Of Your Company
When the insurance provider receives your application, they’ll immediately analyze the size of your business. This includes looking at the number of employees you have and your annual revenue. In general, a bigger company will be considered a bigger risk and vice versa. This is the case, because bigger entities are working with more clients and they have more employees. Therefore, the potential for problems is substantially higher.
It is also vital to remember that your specific line of work will help to determine your overall cost. If the insurance provider feels that you work in a riskier industry, it is likely that they’ll charge you more than other companies. Companies working in specific industries are more prone to lawsuits and they’ll be deemed riskier than others. This is yet another thing that needs to be considered, when determining your monthly premium.
The Layout Of Your Contracts
Another thing to remember is that it is sometimes possible to eliminate lawsuits, by writing your contracts in a certain manner. A well-written contract can actually decrease your exposure to liability. A poorly written contract will greatly increase your risks. Therefore, the insurance provider will probably want to inspect your contract, before they provide you with a price quote. Enhance the effectiveness of your contract and you may be able to decrease your premium.
Employee Training And Experience
While you’re at it, you should never ignore your employees. Proper training and increased experience can improve the efficiency of your employees, while also decreasing the risks involved. Therefore, the insurance provider may be willing to provide you with a discount, if you offer comprehensive training to all of your workers.
As the old saying goes, history frequently repeats itself. This is most certainly true for businesses. If a company has been sued several times in the past, it is highly likely they’ll be sued again sometime in the future. And of course, the insurance provider will examine the company’s history when attempting to determine the cost of their premium. To get the most generous cost, it is best to maintain an unblemished history.
Finally, you should remember that your company can take quality control precautions to greatly decrease the potential for a lawsuit. The insurance provider will take note of this as well. If you have an effective quality control protocol in place, you will ultimately be able to reduce the risk, while also decreasing your premium. Be sure to tell your insurance provider of choice about your quality-control protocol, so you can use it to your advantage.