[Sigia-l] errors & omissions insurance for IAs

[robert.dornbush at ps.ge.com]

I just got $1,000,000 per occurrence / $2,000,000 total from
techinsurance.com but it cost me $1300 (including tax & agent fee) the
actual underwriter is ACE of New York City...perhaps because this is my
first time to apply and my business is brand new...I also went for the same
coverage level on General Liability at a cost of $1,100 also through
Techinsurance, underwritten by The Hartford.

Innie Gone Outtie,
Robert Dornbush

-----Original Message-----
From: George Olsen [mailto:george.olsen at pobox.com]
Sent: Wednesday, January 15, 2003 1:15 AM
To: sigia-l at asis.org
Subject: Re: [Sigia-l] errors & omissions insurance for IAs


On 1/14/03 7:16 PM, "Kathleen Klein" <kathleen at kleininfodesign.com> wrote:

> A new contract with a large high-tech client requires that I carry $2
> million in errors and omissions coverage.
> 
> Do my fellow IAs carry such insurance? If so, at what level of coverage?

Friends of mine have had good luck with Techinsurance.com -- one them got $4
million of coverage for $1,100, turned around in 48 hours.

The consensus I've heard from various consultants, graphic designers, etc.
who are in the same boat is that it's not really worth carry E&O insurance
unless the client requires it. The deductibles and the hassles are so high
that it's just not worth it -- especially now when insurance rates are
getting jacked up across the board.

IMPORTANT: The above advice assumes you've set up an LLC or equivalent to
shield your personal assets from legal liability. If not, insurance could be
well worth it, although the costs of forming an LLC are actually less than a
year's E&O costs (except in places like California, which has a funky tax on
LLCs).

$1 million is more typical for people who carry permanent E&O. You might
also see if there's a short-term policy available that would cover you just
for the time of the engagement, which will bring the cost down.

As Ziya said, it's worth negotiating with the client on this, since it
sounds more like a case of boilerplate legalese that doesn't seem as
applicable. 

And of course if they don't relent, be sure to try to recoup the costs, even
if it means asking about re-negotiating price so that both of you can profit
from the job (assuming you're on good relations with the client).  I realize
I'm probably stating the obvious, but I've seen a couple people in these
situations who just bit the bullet without thinking to do this.

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