Errors and Omissions Insurance for Small Business

Business insurance is useful for protecting the assets of the business. Out of the insurances which are needed by the small businesses, one of the insurance which is useful is the error and omission insurance for small business.

This insurance will protect the company from the claims made by the clients in view of errors. It also protects the company from the claims regarding the failure of doing the work as mentioned in the contract or agreement. It pays for the legal defense costs. Always, it is better to purchase the Errors and Omission Insurance when you are dealing with the customers or clients needs.

Some people are in a misconception that the commercial general liability insurance will also cover the errors and omissions insurance. But in general, commercial general liability insurance will not cover the E&O insurance policy. Generally, the errors and omissions of the contract are considered as the serious risks for any business.

Generally, professional errors are covered using this Error and Omissions Insurance. It creates a lot of risk to the business. In spite of occurrence of many professional errors, only some of them will be sued by the clients. Legal costs for the lawsuits and also the professional errors are protected using the E & O insurance policy.

Mostly, all the businesses have the professionals working in the organization for some or the other needs. The cost of the premium for this insurance will be varying depending on the employees working in the organization as well as the nature of the business done. As the litigation are increasing day-by-day in the field of small businesses, professional liability is much more useful for protecting against those litigation.

Analysis of Small Businesses and Jobs : SBA

Most of the net new jobs are created by new small businesses which are incredibly valuable to the labor market in the long term. These new small businesses are continuing businesses are providing new jobs along with business locations with large employment swings dominating net employment results. They fluctuate most with correspondence to the economy.

• More than one half of the private-sector is employed by the small businesses and the remaining percentage is employed by the large businesses. About 60 million people were employed by small businesses in 2006.
• There was a slight decline in the late 1990s in small firm employment, but this returned to base in the 2000s.
• Economies of scale is the reflection of the employment share of the small firms in private sector. These are largely affected by the whole, technology, the fortunes of various industries, financing, consumer preferences, and a myriad other factors.
• In 2008, the small firms share of part time workers is 21 percent and the part time workers share of small firms is 18 percent.

Net Job Creation

• Majority of private-sector net job creation was accounted by the small businesses for the past 15 years. According to the Bureau of Labor Statistics, about 65 percent of net jobs are created by small businesses. According to Bureau of the Census, small businesses create about 90 percent of jobs (Statistics of U.S. Businesses).
• The existing small business firms play a predominant role in the net job creation. From 1993 to mid 2008, continuing small business establishments have accounted for 69 percent of the net new jobs.

SME Business Growth Barometer UK 2010: BIS

About 26 percent of the SME owners employed less people in February of 2010 when compared to the previous year. There is a significant decrease when compared to previous year which was 38 percent in December 2009 Barometer. Around 57 percent reported that they employ the same number of employees as they had previous year which is up from 49 percent in December. About only 16 percent expressed that they have less employees when compared to the previous year. As per Department of Businesses Innovation and skills, the employments levels are stabilizing.

About 45 percent of SME employers have seen a decrease in their turnover when compared to the previous year. It is similar to previous barometers.

Around 22 percent of SME owners are expecting to employ more people in 12 months when compared with present employment. 65 percent of them think that they will employ very few people. Just 12 percent are least expected to employ.

• 20 percent of the SMEs have more turnover than the previous year.
• About 19 percent of the SMEs have the same turnover.
• More than 50 percent of SMEs have lower turnover.

There is no much change in the figures when compared with December of 2009. When we consider overall trend, turnover levels are seeing a continuing decline when compared to 2008.

About 34 percent of SMEs are expecting their turnover to be more in about 12 months time. 44 percent of them are expecting it to be same. Just 15 percent are expecting a decline in the turnover.