You get insurance in order to protect yourself from disaster. When you think of disaster and insurance, you think of bad weather, stolen goods, or a number of other unforeseen physical mishaps that can ruin your business if you're not covered. The same thinking is often applied to business, where owners have equipment to be safeguarded, payroll to be managed, and all other types of business assets and concerns that need to be covered, too.

In other words, when people think of insurance for themselves or their business, they think of the physical things that can go wrong with that business, and getting coverage to cover those range of possibilities. It's pretty straight forward, common sense, and even forward-thinking to a degree.

The problem is that, with today's business environment, it's just not forward-thinking enough. For business professionals in particular, it's probably only half the equation when it comes to getting yourself and your business properly insured.

E&O Insurance

Errors and Omissions insurance. Ever heard of it? If you're a professional, you better hear of it. Not having it could cost you dearly.

E&O insurance, as it's called, essentially protects the business professional from lawsuits arising from real or perceived misconduct resulting from the normal conduct of business. It goes beyond the kind of insurance most people are used to because it covers aspects of a business that impact others when interacting with the public.

This is also known as professional liability insurance, and the reason liability ought to be of such concern to the business owner is related to the very nature of conducting business in and of itself.

Unlike private individuals and their families, businesses are specifically set up to interact with the public as a matter of routine. You normally don't provide a good or a service to a small circle of friends. You set up a business in order to meet a demand that exists out there in the public. That involves interacting with the public and performing exchanges with them in ways that may be even hard for you to perceive. The extent to which a business or a professional can have an impact on the public can almost literally be unimaginable. This is why things like e & o insurance are necessary.

Say you're a lawyer. You provide legal counsel to a client. That client then turns around and uses that counsel as a basis to form a contract with a third party. That third party and its contract provide services to the public. Someone from that public believes themselves to be hurt or damaged as a result of that service. Well, it's possible that the claim can be traced all the way back to the original counsel provided to the client. It may seem improbable. But just think how many frivolous lawsuits are in existence. Errors real and perceived can end up costing you.

This is a component of liability insurance that many business owner and professionals might not come to fully appreciate until it's too late. This includes e & o insurance. The last thing you want to happen in this regard is to have errors and omissions appraisers come to your door and tell you you're not covered for a particular mistake that comes back to haunt you. Quite literally, the cost could not only be your business, but your reputation as a professional as well.

It's not only errors or mistakes that professionals conduct in the normal practice of business. A plumber might install a wrong kind of pipe. A doctor might prescribe the wrong type of medication — which gets malpractice liability involved for the professional as well. An IT professional might install the wrong type of software for a computer system. This stuff happens, and errors and omissions appraisers will usually deal with these kinds of issues as a matter of routine.

Where some of the unforeseen difficulty lies with the conduct of a professional is the possibility of errors or omissions that are simply perceived as such by individuals affected by what you do. In other words, it's not only the real mistakes that you make as a professional that can come back to bite you, it's the mistakes people think you make that can cost you dearly, too — especially if you don't have e & o insurance.

You might ask, well how does that work? Think about it. If somebody just thinks your professional conduct cost them harm or injury, you'll need to hire lawyers yourself, which can mean considerable legal fees in and of themselves. There's also the possibility that you'll lose a case because a jury doesn't like you, even though you didn't technically do anything wrong. Just being in the right, or thinking you're being in the right isn't enough. You need a jury to think so, too, and that can sometimes be like rolling the dice at an all-night casino game.

There is also the possibility that, even though damages were the result of an error incorrectly perceived as such by another party, that they're deemed as damages nonetheless. In other words, damages from perceived errors are still damages, and somebody might be seen as having been responsible. That somebody might be you. Unless you have e & o insurance that covers such possibilities, the last people who will want to be your friends in a crisis are those pesky errors and omissions appraisers. They won't necessarily care about what's right, they'll care about what they have to cover.

Are the contents of your home or business properly ensured? There’s really only one way to know with any degree of certainty: perform an asset inventory. Collectors, in order to obtain insurance riders, are required to itemize each of their collectible items, recording any identifying information as well as taking a photo and substantiating value. But beyond that, the majority of us have not performed an asset inventory. So we don’t really know if we’re properly insured. Have we accounted for our clothes, CD’s/DVD’s, software programs, toys, etc. – items typically forgotten in the insurance estimate?

An asset inventory is not difficult to perform. Start with a list of all of your belongings by room. Then walk from room to room, recording the brand, model, serial number, original purchase date and purchase price for each item. Take a photo while you’re obtaining the above info. Spend a few minutes and gather any receipts that you have that can accompany your inventory information. When you’ve documented everything, calculate the total value of your belongings and compare this information to the current value of your insurance policy. At this point, it’s also a good idea to determine if your insurance policy covers replacement cost or actual cash value. Depending on your individual situation, you may opt for one type of coverage over the other.

Remember, in the event of a claim, your insurance company will want the information noted above anyway. So by completing your inventory for insurance evaluation purposes, you’ll also be arming yourself with the information required to expedite a claim, should you need to file one. And beyond those two uses, a completed inventory can be used for many other purposes (for both personal and business reasons): estate planning, divorce proceedings, loss substantiation, depreciation schedules, loan collateral report, etc.

So, don’t delay. With the average premium for homeowners insurance in the US looming just under $900, now is the time to complete your asset inventory and to determine if you are properly insured.

When you buy loose diamonds, just as when you buy diamond jewelry, it's really important to get them insured. Loose diamonds can be difficult to identify if stolen, so they're often more vulnerable than jewelry. They're also easier to lose. But how should you go about finding the right kind of insurance for your loose diamonds?

Insuring loose diamonds can be done in several ways. The most common option is a policy which offers to pay out a set amount of money, established at the point of signing, for each of your loose diamonds. Policies like these are usually cheapest but can leave you vulnerable if there's any considerable shift in the market value of your loose diamonds. An alternative is a more expensive policy which pays out the established market value of your loose diamonds at the time of loss, enabling you to replace them immediately. But some precious things can't really be replaced, and loose diamonds are no exception. If you have a sentimental attachment to your loose diamonds - for instance, if you've inherited them from a beloved relative - it may be worth your while negotiating a special policy which will reflect that. This is usually the most expensive option of all, but it will give you flexibility and the option of something more closely approaching real compensation.

Even if you're negotiating you insurance policy, you won't be able to obtain any cover for your loose diamonds unless you have certificates for them. This is one of the many reasons why, if you agree to buy loose diamonds without certificates, you should get them professionally appraised. You can also reduce the cost of your insurance policy by getting your loose diamonds scanned, enabling them to be identified by computer at a later date.

Insurance for loose diamonds may seem complicated and expensive, but it's something you can't afford to be without, so make sure you get it right.