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Errors and Omissions Ins

What's the average cost to cover a 6 mo/40 hr a week contract?  What are the factors that go into this pricing?  Any recommendations as far as insurance companys to go with?  I am an independent contractor, and have been asked to carry this.

Just curious.
Monday, May 17, 2004

What do you mean by cost. Insurance, office space, hardware depreciation, software purchases, training, etc.?

Edward
Monday, May 17, 2004

Nationwide has a blanket protector that you can buy that includes workers comp, business liability, etc... The price is going to vary wildly by your locale; a year's worth might cost anywhere from $250-$1000.

Mark L. Smith
Monday, May 17, 2004

There are some online pricing tools (I think techinsurance.com may be one, but don't have time to double-check now) that you can use to get quotes for this kind of thing. I have no idea how competitive they are, but they might at least give you a sense of what kind of questions are likely and some sort of ball-park figure. I would expect stuff like how long have you been in the industry, will you be dealing with financial or otherwise sensitive data or in risk-prone industries, do you have a past history of claims/legal actions against you, do you have a standard engagement agreement and a lawyer who reviews your contracts before you sign, etc.

Also, it may pay to be clear on the difference between plain old liability insurance (to protect against slip/fall accidents and the like where may be "your" fault only indirectly) and professional liability insurance (e&o, basically protection against you screwing something up). Good to know whether your customer demands one or other or both.

If liability is a real concern you might also want to ask your lawyer and accountant about setting up an LLC. Not expensive, little overhead, and provides an additional layer of protection if you are careful.

John C.
Monday, May 17, 2004

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