Businesses face evolving risks as they adapt to changing circumstances throughout a policy period. It is important to know that errors and omissions (E&O) risks can arise from common business changes. As your insurance agent, eSpecialty plays a crucial role in helping you identify and mitigate these risks so here are four common changes and their implications that you should keep us informed of:
- Expanding the services you offer: New professional services may not be covered by general liability policies, requiring specialized coverage. This is our specialty so you are in the right place!
- Changes in corporate structure: As your business grows, you may form new corporate entities. It is important that your agent know the current structure of your company to ensure that your coverage is appropriate.
- Diminishing ability to meet contractual deadlines: Changes in your business can result in staffing, financing, or general business operations challenges, which may result in difficulty meeting contractual deadlines and performance metrics. In some cases, this can trigger allegations of non-performance, placing businesses at risk of reputational damage and financial losses. To address this, businesses must carefully assess their capacity, update staffing models, and establish realistic expectations for contractual commitments.Staffing disruptions can result in allegations of non-performance. Businesses must manage capacity and set realistic expectations.
- Hiring more inexperienced staff: Staffing challenges are a common concern in today’s job market. Businesses may feel compelled to hire less experienced employees to fulfill demands, particularly when tenured staff are scarce. However, this increases the potential for errors and mistakes, leading to claims and financial damages. To mitigate these risks, businesses should prioritize talent development and invest in comprehensive training programs.
- Using independent contractors: To optimize operating costs and accommodate fluctuating demands, many businesses turn to independent contractors. While this can offer flexibility, it also introduces new risks. With less control and oversight over contractors, businesses may face challenges in maintaining service quality and protecting their reputation. Thorough due diligence and clear contractual agreements are crucial when engaging independent contractors.
How Can eSpecialty Help?
As independent agents, we guide businesses through these changes. We select carrier partners offering comprehensive coverage and risk management solutions. By addressing E&O risks proactively, businesses can protect their operations and thrive in a dynamic business environment.