As a court reporter you need to carry both Commercial General Liability as well as the Professional Liability (more commonly known as Errors & Omissions or E&O in the US), but very few court reporters truly understand the difference between them. Here are the primary characteristics of each:
Commercial General Liability
In some cases, a liability loss is an amount that a person would be required to pay as a result of a legal claim against him for his wrongful acts causing injury or damage to others. Wrongful acts causing legal liability or claims may arise from any of the following:
Please take note ... a tort is a wrongful act or omission-causing harm to others (negligence) or invading others' protected rights (nuisance). If someone's acts of negligence or nuisance cause harms to others, the law provides for remedy to the victim through an action for damages or compensation. This is the legal liability exposure.
No matter how careful your business may be, there is always a risk that someone or something will be injured or damaged in the course of your operations as a court reporter. If you should be sued over alleged property damage or bodily injury, your legal fees and other expenses will accrue quickly. Your business even could go broke if confronted with a large settlement or judgment.
Commercial General Liability protects your court reporter business against costly claims of bodily injury or property damage.
Some court reporters have a hard time imagining a scenario in which their business could be responsible for hurting or killing someone, or for causing someone to suffer an illness or disease. But because accidents do happen and lawsuits are common, Commercial General Liability insurance is one of the most popular forms of insurance protection purchased by court reporters. These policies pay for medical expenses, funeral expenses, loss of services, and court-awarded compensation if an injury results in someone's death – costs that are typically far too large for an average court reporter to sustain on their own.
Professional Liability (E&O)
The primary purpose of professional liability insurance is to cover claims resulting from financial damage to a client or person that was caused by negligence on the part of your services. This claim could also be caused by an error or omission of important information and is therefore also called Errors & Omissions insurance, or E&O. It differs from Commercial General Liability in that the damage falls more under the intellectual category than under the tangible damage category, but both are equally catastrophic to the affected party.
The high cost of a legal defense could put your court reporting firm out of business. Your company's survival and your personal financial security depend upon you having the proper protection against the impact of a lawsuit.
Almost any firm or individual that improperly performs services can cause a client to suffer an economic loss - and mounting a defense is expensive. The impact of even a baseless claim can be devastating. Would your court reporting business have the resources and expertise to defend against such a claim?
Bill West is the founder of AMIS/Alliance Marketing & Insurance Services. He has been in the insurance business since 1965, as a Private Investigator, Insurance Adjuster and Third Party Administrator. He launched AMIS in 1987. It has grown to be the largest writer of Private Investigator insurance in the U.S. according to First Mercury Insurance Company.