I was recently sent a request for proposal for a website project. One of the requirements to bid is certificate or liability insurance and certificate of errors & omissions insurance. What is this? How much should it cost? Do I really need it?
InsuranceBee have a video explaining some of the reasons for e&o insurance, which may be useful: Professional Liability 5 Reasons | Errors and Omissions Insurance
You can also get quotes online with them.
Hope that helps!
It's a standard type of insurance that many public sector clients require, mainly to protect themselves but also as a sign of professionalism and an established company.
Whether you need it or not depends on the type of work you do and where you do it, but it sounds like if you want to bid on that job you'll need it!
The cost depends on the size of your company, and with E&O insurance the age of your company.
I'm mostly building website applications. I'm on my own, working from home.
Working from home means you really don't need liability ins unless you have clients hanging out at your house.
Building 'website applications' is too vague to address. But really, it's probably just a question of whether you want to get the insurance just to bid on that job.
Thanks, I'll look into it.
I have some clients that require that I carry insurance. That mandate is is passed to them from their insurance policy. If I use a subcontractor to complete work for me, my insurance policy mandates that they have insurance.
It's all a big conspiracy by the insurance companies!
For me, I don't consider the policy that expensive since theses clients bring many, many times the cost of the policy to me in revenue.
In addition, it lends sense of professionalism to a new client when you disclose that you carry a x million dollar policy.
Are they telling you that you cannot bid without proof of insurance or is it worded that you must have it in place before project execution?
If you do need to have it first, shop around. I was surprised at the difference in prices when I called a few different agents.
It's listed under qualifications in the proposal:
-Certificate of Liability Insurance
-Certificate of Errors & Omissions Insurance
OK, so you need it up front to even bid. You'll have to determine if the price of the policy is worth it to bid this job.
You may be able to talk to an agent and explain that you need it to bid - but it is not a given that you will win it. Maybe they have an option where you can go month by month during the process until you know if you need it. I pay yearly, but I think there was a monthly option in my policy.
Thanks for the info, I'll start shopping around today.
I'm getting quotes from local agencies for around $1200 - $2000. Have you ever heard of Hiscox? They quoted $400 with monthly payments - all online. Too good to be true?
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