The main objective of E&O insurance is to guarantee the protection of your assets in the event that you are liable, judicially or through a direct claim, for causing material, bodily or moral damages to the third parties.
The indemnity that the insured has to pay may be reimbursed up to the limit established in the policy, depending on the coverage contracted, and may include expenses with legal costs and lawyer.
In fact, it is not insurance ‘against’ or ‘in favor’ of the third parties, but in favor of the insured on behalf of whom the insurance was made. Without such protection, personal property may be confiscated on behalf of the court order to pay for the economic losses claimed by the third parties.
Third parties, in this case, are extraneous parties to the insurance contract, since this is bilateral, where only two persons are insured. The E&O insurance comprises several realities, with hedges for the individual risks such as family, real estate and car owners, trade, industry, etc.
The risks for the activities of independent, self-employed or contracted professionals are individualized, even when insurance is provided by the companies for which they provide services or companies with which they have employment relationships.
The E&O insurance differs from the traditional insurance for the reason that coverage covers the consequences of material, bodily or moral damages that the insured may cause to third parties.
Since E&O insurance guarantees repayment to the insured, in the event that the insured is civilly liable for causing injury to third parties, it is recommended that you research with lawyers and inquire with your insurance broker about the types of damages that have been paid for property damage, corporeal and moral, in situations to which you are also exposed.
The values found serve as a reference to define how much will be the need for the insured amount of your E&O insurance.
The cost of this insurance is also not uniform. The calculation is differentiated case by case and the reimbursement varies according to the amount contracted in the policy. Given their particular characteristics, anyone can make E&O insurance with coverage appropriate to the type of protection they need.
In individual civil liability, there is a family policy, which can also be offered with residential insurance, which covers involuntary damages and losses caused to third parties by you and your family members, as well as employees, servants and pets.
In the insurance of your automobile, you can contract the additional coverage of E&O insurance that guarantees the payment of damages caused to other people, like in a traffic accident for which you are responsible. It is easy to contract and usually guarantees high value compensation at modest insurance cost.